EXHIBIT 2.1
AGREEMENT
BY AND AMONG
CONAGRA FOODS, INC.,
S&C HOLDCO, INC.
AND
HMTF RAWHIDE, L.P.
DATED AS OF MAY 20, 2002
AGREEMENT
AGREEMENT, dated as of May 20, 2002, by and among HMTF Rawhide, L.P., a
Delaware limited partnership ("Acquisition LP"), ConAgra Foods, Inc., a Delaware
corporation ("ConAgra"), and S&C Holdco, Inc., a Delaware corporation
("Holdco").
RECITALS:
(a) ConAgra and Acquisition LP desire to enter into a transaction to
jointly own and operate the Acquired Companies pursuant to the
integrated acquisition steps outlined herein below.
(b) Acquisition LP's sole general partner is HMTF RW L.L.C. and its
limited partners are Greeley Investments, LLC and Affiliates of Hicks,
Muse, Xxxx & Xxxxx Incorporated, each of which respectively have
99.979% and 0.001998% limited partners interests as of the date
hereof.
(c) ConAgra is the direct owner of all of the issued and outstanding
capital stock of Holdco and Holdco will be the direct owner of all of
the issued and outstanding capital stock of S&C Holdco 2.
(d) S&C Holdco 2 will be the direct owner of all of the issued and
outstanding capital stock of S&C Holdco 3 and Cattle Holdco.
(e) S&C Holdco 3 will be the direct owner of all of the issued and
outstanding capital stock of U.S. Acquisition Co.
(f) U.S. Acquisition Co. will be the direct owner of all of the issued and
outstanding capital stock of Australia Acquisition Co. and Brand
Holdco (collectively with Holdco, S&C Holdco 2, S&C Holdco 3, Cattle
Holdco and U.S. Acquisition Co., the "Acquiring Companies").
(g) ConAgra is the owner, directly or indirectly, of all the issued and
outstanding capital stock, voting securities and other ownership
interests of the companies (other than Better Beef LLC and Colorado
Feed LLC, which ownership interests shall be described on Exhibit A)
set forth on Exhibit A (collectively, the "Acquired Companies").
(h) As provided herein, Acquisition LP shall purchase a majority equity
interest in Holdco.
(i) As provided herein, Holdco or its Affiliates shall purchase from
ConAgra or its Affiliates all the issued and outstanding shares of
capital stock, voting securities and other ownership interests of the
Acquired Companies (and in the case of Better Beef LLC and Colorado
Feed LLC, all such ownership interests therein owned, directly or
indirectly, by ConAgra).
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AGREEMENT:
In consideration of the foregoing recitals and in further consideration of
the mutual covenants and agreements hereinafter contained, the parties hereto
agree, subject to the terms and conditions hereinafter set forth, as follows:
1. DEFINITIONS.
1.1. CERTAIN DEFINED TERMS. As used in this Agreement, the following
terms shall have the following respective meanings:
"Action" shall mean any claim, action, litigation, suit, grievance,
arbitration, inquiry, proceeding or investigation by or before any
Governmental Authority or arbitrator.
"Affiliate" shall mean, with respect to any specified Person, any
other Person that directly, or indirectly through one or more
intermediaries, Controls, is Controlled by, or is under common Control
with, such specified Person.
"Agreement" shall mean this Agreement.
"Businesses" shall mean the businesses conducted by the Acquired
Companies.
"Closing Material Adverse Effect" shall mean the occurrence after the
date hereof of either (a) a case of bovine spongiform encephalopathy in
livestock located in any of the following countries: the United States or
Australia; or (b) a case of bovine hoof (or foot) and mouth disease in
livestock located in any of the following countries: the United States or
Australia.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Company Material Adverse Effect" shall mean any result, occurrence,
fact, change or event (whether or not such result, occurrence, fact, change
or event has manifested itself in the historical financial statements of
the Businesses, and whether known or unknown as of the date of this
Agreement or the Closing Date) that has had, or can reasonably be expected
to have, a material adverse impact on (A) the (1) business, (2) operations,
(3) financial condition, (4) results of operations or (5) capitalization,
in each case, of the Businesses taken as a whole, or (B) the ability of
ConAgra, any Acquired Company or any Acquiring Company to consummate the
transactions contemplated by this Agreement; provided, however, that the
following shall not be taken into account in determining whether there has
been a "Company Material Adverse Effect":
(i) any such effects attributable to general conditions affecting the
United States or Australian economy nationally or regionally (including,
without limitation, prevailing interest rate and securities market levels);
(ii) any such effects attributable to conditions (whether
economic, legal, regulatory, financial, political or otherwise) affecting
the beef processing, pork
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processing or cattle feeding industry or market generally which do not
affect the Businesses materially disproportionally relative to other
similarly situated participants in the beef processing, pork processing or
cattle feeding industry or market;
(iii) any such effects relating to or resulting from, directly or
indirectly, the transactions contemplated by this Agreement or the
announcement or pendency thereof;
(iv) the fees and expenses, severance and other benefit or
compensation costs paid or to be paid by an Acquiring Company or Acquired
Company pursuant to this Agreement in connection with the transactions
contemplated in this Agreement;
(v) any action taken by, or inaction of, ConAgra with the prior
written consent of Acquisition LP; and
(vi) any failure by the Businesses to meet any internal projections,
expectations or forecasts or published revenue or earnings predictions for
any period ending on or after the date of this Agreement as a result of any
one or more of the events described in items (i) - (v) above.
"Confidentiality Agreement" shall mean collectively the
Confidentiality Agreement dated October 26, 2001, between Booth Creek
Management Corporation and ConAgra and the Confidentiality Agreement dated
February 19, 2002, between ConAgra and Hicks, Muse, Xxxx & Xxxxx
Incorporated.
"Control" (including the terms "Controlled by" and "under common
Control with"), with respect to the relationship between or among two or
more Persons, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the affairs or management of a
Person, whether through the ownership of voting securities, by contract or
otherwise, including, without limitation, the ownership, directly or
indirectly, of securities having the power to elect a majority of the board
of directors or similar body governing the affairs of such Person.
"Covered Countries" shall mean the United States, Australia, Canada,
Japan, Korea, Taiwan, China and Mexico.
"DOJ" shall mean the United States Department of Justice.
"Environmental Site Assessments" shall mean the reports, surveys and
site assessments listed on Exhibit 1.1(a) attached hereto.
"FATA" shall mean the Foreign Acquisitions and Takeovers Act of 1975,
as amended.
"Feed Lot Business" shall mean the cattle feeding and feed lot
business activities conducted by U.S. Beef Company, its Subsidiaries, and
Colorado Feed LLC in the United States at the locations set forth on
Exhibit 1.1(b), including, without limitation, the cattle feeding
activities conducted for third parties at such locations.
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"Fee Letter" shall mean the fee letter dated May 20, 2002, relating to
the Senior Bank Commitment Letter and the Bridge Commitment Letter.
"FIRB" shall mean the Foreign Investment Review Board.
"FTC" shall mean the United States Federal Trade Commission.
"GAAP" shall mean United States generally accepted accounting
principles applied in a manner consistent with the accounting principles
used in the preparation of, and reflected in, the Audited Financial
Statements.
"Governmental Authority" shall mean any federal, state, local,
municipal or foreign government, or other governmental, regulatory or
administrative authority, agency or commission or any court, tribunal, or
judicial or arbitral body.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended.
"Knowledge" shall mean, when used in reference to ConAgra or the
Acquired Companies, the actual knowledge of those individuals listed on
Exhibit 1.1(c) hereto.
"Law" shall mean any currently existing federal, state, local or
foreign statute, law, ordinance, regulation, rule, order, code, permit,
governmental restriction, decree, injunction or other requirement of law of
any Governmental Authority or any judicial or administrative interpretation
thereof.
"Liabilities" shall mean any and all debts, liabilities and
obligations of any nature, whether known or unknown, contingent or
liquidated.
"Lien" shall mean any mortgage, pledge, hypothecation, security
interest, encumbrance, easement, covenant, title defect, title retention
agreement, voting trust agreement, right-of-first refusal, and lien of any
nature.
"Person" shall mean any individual, partnership, firm, corporation,
limited liability company, association, trust, unincorporated organization,
other entity or Governmental Authority.
"Prevailing Rate" shall mean seven percent (7%) per annum.
"Processing Business" shall mean the business of the Acquired
Companies other than the Feed Lot Business.
"Processing Companies" shall mean, collectively, each of the Acquiring
Companies and Acquired Companies other than Cattle Holdco, Cattleco and
Colorado Feed LLC.
"Subsidiary" shall mean, with respect to any Person, another Person
owned directly or indirectly by such Person by reason of such Person owning
or controlling an
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amount of the voting securities, other voting ownership or voting
partnership interests of another Person which is sufficient to elect at
least a majority of its Board of Directors or other governing body of
another Person or, if there are no such voting interests, at least a
majority of the equity interests of another Person.
1.2. OTHER DEFINED TERMS. The following terms shall have the
meanings given to such terms in the Sections indicated below.
TERM SECTION
---- -------
1936 Act.............................................................................. 7.9.1(ix)
Acquired Companies.................................................................... recital (g)
Acquiring Companies................................................................... recital (f)
Acquisition LP........................................................................ preamble
Acquisition LP Affiliate.............................................................. 15.4
Acquisition LP Funding Amount......................................................... 2.2.1
Acquisition LP Holdco Stock........................................................... 2.2.2
Acquisition LP Percentage Interest.................................................... 2.2.2
Acquisition Proposal.................................................................. 9.12.1
Additional Consideration.............................................................. 2.2.7
Adjustment............................................................................ 13.5.2
Aggregate Consideration............................................................... 3.1.1
Armour Transition License Agreement................................................... 4.1.1(v)
ASIC.................................................................................. 2.1.15
Audit................................................................................. 5.1.2
Audited Australian Closing Balance Sheet.............................................. 5.1.2
Audited Cattleco Closing Balance Sheet................................................ 5.1.2
Audited Closing Balance Sheets........................................................ 5.1.2
Audited Financial Statements.......................................................... 7.7
Audited Processing Closing Balance Sheet.............................................. 5.1.2
Australia Acquisition Co.............................................................. 2.1.15
Australia Holdco...................................................................... 2.1.21
Australia Operating Company .......................................................... 2.1.5
Australia Operating Company Stock..................................................... 2.2.8
Australian Acquired Company........................................................... 7.17.20
Australian Company.................................................................... 7.9.1(ix)
Australian Stockholder Net Investment................................................. 5.1.7(iii)
Authorization Date.................................................................... 14.2.1
Balance Sheet Date.................................................................... 7.7
Better Beef LLC....................................................................... 2.1.11
BI Claim.............................................................................. 9.7.4
Brand Holdco.......................................................................... 2.1.16
Bridge Commitment Letter.............................................................. 8.5
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TERM SECTION
---- -------
By-Products Agreement................................................................. 4.1.1(xix)
Cactus Project........................................................................ 14.1.1
California Xxx Litigation............................................................. 9.7.3
Cash Management Agreement............................................................. 2.2.3
Cattle Holdco......................................................................... 2.1.3
Cattle Supply Agreement .............................................................. 4.1.1(x)
Cattleco.............................................................................. 2.1.6
Cattleco Loan Agreement............................................................... 2.2.3
Cattleco Loan Amount.................................................................. 2.2.3
Cattleco Note......................................................................... 2.2.7
Cattleco Revolver..................................................................... 2.2.3
Cattleco Stock........................................................................ 2.2.7
Cattleco Stock Purchase Price......................................................... 2.2.7
Cattleco Stockholder Net Investment................................................... 5.1.7(ii)
Cattlemen Litigation.................................................................. 12.3
CERCLA................................................................................ 7.18.9(i)
CERCLIS............................................................................... 7.18.7
Charter Documents..................................................................... 7.2
Closing............................................................................... 4.1
Closing Date.......................................................................... 4.1
Colorado Feed LLC..................................................................... 2.1.6
Combined Processing Company Stockholders Net Investment............................... 5.1.7(i)
Commitment Letters.................................................................... 8.5
Commonly Controlled Entity............................................................ 7.17.5
Company Employees..................................................................... 6.1
Company Litigation.................................................................... 9.7.1
Company Material Contracts............................................................ 7.14
ConAgra............................................................................... preamble
ConAgra 401(k) Plans.................................................................. 6.5
ConAgra Disclosure Schedule........................................................... 7
ConAgra Group......................................................................... 7.9.1(vii)
ConAgra Indemnified Costs............................................................. 12.3
ConAgra Indemnified Parties........................................................... 12.3
ConAgra Mexican Stock................................................................. 2.2.6
ConAgra Minority Mexican Stock Interest............................................... 2.2.5
ConAgra Pension Plans................................................................. 6.4
ConAgra Red Meat Business............................................................. 7.7
ConAgra's 125 Plan.................................................................... 6.7
Deed of Cross Guarantee............................................................... 2.1.22
Deloitte.............................................................................. 5.1.1
Divested Companies.................................................................... 2.1.5
Divestiture........................................................................... 12.1.1(d)
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TERM SECTION
---- -------
Xxxxx Plant........................................................................... 14.1.1(a)
Effective Time........................................................................ 4.1
Election Notice....................................................................... 14.2.1
Employee Plan......................................................................... 7.17
Engagement Letter..................................................................... 8.5
Environmental Costs or Liability...................................................... 7.18.9(iv)
Environmental Laws.................................................................... 7.18.9(i)
Environmental Permits................................................................. 7.18.3
ERISA................................................................................. 6.3
Estimated Australian Closing Balance Sheet............................................ 3.1.2
Estimated Australian Stockholder Net Investment....................................... 3.1.2
Estimated Combined Processing Company Stockholders Net Investment..................... 3.1.2
Estimated Processing Company Closing Balance Sheet.................................... 3.1.2
Excess Non-Income Tax Accrual......................................................... 13.3.3
Factoring Agreements.................................................................. 9.11
Final Australian Closing Balance Sheet................................................ 5.1.3(ii)
Final Cattleco Closing Balance Sheet.................................................. 5.1.3(ii)
Final Processing Closing Balance Sheet................................................ 5.1.3(ii)
Financial Advisory Agreement.......................................................... 4.1.1(xii)
Financial Statements.................................................................. 7.7
Fund V................................................................................ 2.2.1
Fund V Commitment Letter.............................................................. 8.5
Garden City Assets.................................................................... 12.7.2
Garden City Insurance Capital Contribution............................................ 9.7.4
Garden City Insurance Claims.......................................................... 9.7.4
Garden City Value..................................................................... 12.7.2
Gillco................................................................................ 8.5
Gillco Subscription Agreement......................................................... 8.5
Guarantees............................................................................ 9.2.1
Hangar License Agreement.............................................................. 4.1.1(vii)
Hazardous Materials................................................................... 7.18.9(ii)
Holdco................................................................................ preamble
Holdco Acquisition Note............................................................... 2.2.6(vii)
Holdco Common Stock................................................................... 2.2.2
Holdco Indemnified Costs.............................................................. 12.1.1
Holdco Indemnified Parties............................................................ 12.1.1
Holdco's 125 Plan..................................................................... 6.7
Income Taxes.......................................................................... 7.9.3
Indemnification and Release Agreement................................................. 4.1.1(i)
Indemnified Costs..................................................................... 12.3
Indemnified Parties................................................................... 12.3
Indemnifying Party.................................................................... 12.4.1
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TERM SECTION
---- -------
Independent Expert.................................................................... 5.1.3(ii)
Initial Australian Stockholder Net Investment......................................... 3.1.1
Initial Combined Processing Company Stockholders Net Investment....................... 3.1.1
KK Japan Stock........................................................................ 2.2.6
Korean Xxx Litigation................................................................. 9.7.3
Labor Laws............................................................................ 7.16.3
Leases................................................................................ 7.14
Leuking Litigation.................................................................... 12.1.2(a)
Licenses.............................................................................. 7.13.2
LLC Employees......................................................................... 6.19
Management............................................................................ 9.1.1
material covenants and material obligations........................................... 9.10
Xxxxxxxxxx Facilities................................................................. 14.2.1
Monthly Reports....................................................................... 9.1.3
Xxxxxxxxxx Owner...................................................................... 14.2.1
Most Recent Balance Sheet............................................................. 7.7
Most Recent Unaudited Financial Statements............................................ 7.7
Multiemployer Plan.................................................................... 6.4
Non-Income Taxes...................................................................... 7.9.3
Nonqualified Plan..................................................................... 6.11
Non-Trademark Intellectual Property................................................... 7.10.4
Notice of Objection................................................................... 5.1.3(i)
NPL................................................................................... 7.18.7
Pension Plan.......................................................................... 7.17
Post-Closing Cattlemen Litigation..................................................... 12.3
Pre-Closing Cattlemen Litigation...................................................... 12.1.2(a)
Pre-Closing Damages................................................................... 12.1.2(b)
Pre-Closing Period.................................................................... 7.9.3
Pre-Closing Straddle Period Income Tax................................................ 13.3.3
Pre-Closing Straddle Period Non-Income Tax............................................ 13.3.3
Pre-Existing Environmental Matters.................................................... 12.1.1(a)
Preferred Supplier Agreement.......................................................... 4.1.1(ii)
Preliminary Australian Closing Balance Sheet.......................................... 5.1.1
Preliminary Cattleco Closing Balance Sheet............................................ 5.1.1
Preliminary Closing Balance Sheets.................................................... 5.1.1
Preliminary Processing Company Closing Balance Sheet.................................. 5.1.1
Prior Unaudited Financial Statements.................................................. 7.7
Processing Company Stock.............................................................. 2.2.8
Profit Amount......................................................................... 12.7.5
Promissory Note....................................................................... 2.2.6(ix)
Proposed Purchase Price............................................................... 14.2.1
Quarterly Statements.................................................................. 9.1.3
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TERM SECTION
---- -------
Records............................................................................... 9.9
Reimbursement Accounts................................................................ 6.7
Release............................................................................... 7.18.9(iii)
Report................................................................................ 5.1.2
Representation and Warranty Certificate............................................... 9.2.3(c)
Retained Records...................................................................... 9.9
Rights................................................................................ 9.8
Risk Management Agreement............................................................. 4.1.1(ix)
S&C Holdco 2.......................................................................... 2.1.1
S&C Holdco 2 Acquisition Note......................................................... 2.2.6(vi)
S&C Holdco 3.......................................................................... 2.1.2
S&C Holdco 3 Acquisition Note......................................................... 2.2.6(v)
Securities Act........................................................................ 7.5
Senior Bank Commitment Letter......................................................... 8.5
Straddle Period Return................................................................ 13.3.3
Stockholders Agreement................................................................ 4.1.1(iii)
Superior Offer........................................................................ 9.12.2
Swift Transition License Agreement.................................................... 4.1.1(vi)
Tax Losses............................................................................ 13.5.1
Tax................................................................................... 7.9.3
Tax return............................................................................ 7.9.3
Termination Date...................................................................... 11.1(b)
Termination Fee....................................................................... 9.12.1
third-party action.................................................................... 12.4.1
Trademark Intellectual Property....................................................... 7.10.3
Transaction Documents................................................................. 7.3
Transfer.............................................................................. 14.2.4
Transfer Notice....................................................................... 14.2.1
Transition Services Agreement......................................................... 4.1.1(iv)
U.S. Acquisition Co................................................................... 2.1.4
U.S. Beef Company .................................................................... 2.1.5
U.S. Beef Company Stock............................................................... 2.2.6
U.S. Pork Company .................................................................... 2.1.8
U.S. Pork Company Stock............................................................... 2.2.6
U.S. Processing Company Stock......................................................... 2.2.6
Unaudited Financial Statements........................................................ 7.7
Voting Debt........................................................................... 7.6
Welfare Plan.......................................................................... 6.6
2. FORMATION COVENANTS.
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2.1. CERTAIN PRE-CLOSING COVENANTS AND ACTIONS. ConAgra and Holdco
hereby covenant and agree to take, or cause to be taken, the
following actions prior to the Closing Date:
2.1.1. ConAgra shall cause Holdco to (i) incorporate S&C Holdco
2, Inc. ("S&C Holdco 2") by filing with the Secretary of
State of the State of
Delaware a certificate of
incorporation in the form attached hereto as Exhibit
2.1.1(a), (ii) cause S&C Holdco 2's organizational minutes
to be in the form attached hereto as Exhibit 2.1.1(b), and
(iii) cause S&C Holdco 2 to take the actions set forth in
such organizational minutes, including the adoption of
by-laws in the form attached hereto as Exhibit 2.1.1(c).
After its formation, ConAgra shall cause such certificate
of incorporation and by-laws not to be amended in any
respect prior to the Closing.
2.1.2. ConAgra shall cause S&C Holdco 2 to (i) incorporate S&C
Holdco 3, Inc. ("S&C Holdco 3") by filing with the
Secretary of State of the State of
Delaware a certificate
of incorporation in the form attached hereto as Exhibit
2.1.2(a), (ii) cause S&C Holdco 3's organizational minutes
to be in the form attached hereto as Exhibit 2.1.2(b), and
(iii) cause S&C Holdco 3 to take the actions set forth in
such organizational minutes, including the adoption of
by-laws in the form attached hereto as Exhibit 2.1.2(c).
After its formation, ConAgra shall cause such certificate
of incorporation and by-laws not to be amended in any
respect prior to the Closing.
2.1.3. ConAgra shall cause S&C Holdco 2 to (i) incorporate Swift
Cattle Holdco, Inc. ("Cattle Holdco") by filing with the
Secretary of State of the State of
Delaware a certificate
of incorporation in the form attached hereto as Exhibit
2.1.3(a), (ii) cause Cattle Holdco's organizational
minutes to be in the form attached hereto as Exhibit
2.1.3(b), and (iii) cause Cattle Holdco to take the
actions set forth in such organizational minutes,
including the adoption of by-laws in the form attached
hereto as Exhibit 2.1.3(c). After its formation, ConAgra
shall cause such certificate of incorporation and by-laws
not to be amended in any respect prior to the Closing.
2.1.4. ConAgra shall cause S&C Holdco 3 to (i) incorporate Swift
Meats Holding Company ("U.S. Acquisition Co.") by filing
with the Secretary of State of the State of
Delaware a
certificate of incorporation in the form attached hereto
as Exhibit 2.1.4(a), (ii) cause U.S. Acquisition Co.'s
organizational minutes to be in the form attached hereto
as Exhibit 2.1.4(b), and (iii) cause U.S. Acquisition Co.
to take the actions set forth in such organizational
minutes, including the adoption of by-laws in the form
attached hereto as Exhibit 2.1.4(c). After its formation,
ConAgra shall cause such
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certificate of incorporation and by-laws not to be amended
in any respect prior to the Closing.
2.1.5. To the extent necessary, ConAgra shall cause ConAgra Beef
Company, a
Delaware corporation ("U.S. Beef Company"),
Australia Meat Holdings Pty. Limited, an Australian
corporation ("Australia Operating Company"), the other
Acquired Companies and the Acquiring Companies, as
applicable, to divest, and cause each Subsidiary thereof
to divest, itself of all the issued and outstanding
capital stock of each of the companies and all the assets
set forth on Exhibit 2.1.5 (the "Divested Companies"), so
that following such divestiture no Acquiring Company or
Acquired Company shall, directly or indirectly, own, hold
or have any interest in any Divested Companies. The
parties acknowledge that such divestiture may be made, as
applicable, by way of a dividend.
2.1.6. Subject to Section 9.8 and the transfers contemplated by
Section 2.1.23(x), to the extent that Xxxxxxx Finance
Company, Inc., a Colorado corporation ("Cattleco"), is not
the owner or lessee thereof, and to the extent of all the
rights, titles and interests (including, without
limitation, leasehold interests) owned by ConAgra or
another Subsidiary thereof, including, without limitation,
those rights, titles and interests held by any Divested
Company and U.S. Beef Company's interest in Northern
Colorado Feed LLC, a Colorado limited liability company
("Colorado Feed LLC") (subject to any purchase rights held
by the other member of Colorado Feed LLC pursuant to
Colorado Feed LLC's operating agreement), ConAgra shall
cause all of the rights, titles and interests of ConAgra
or any of its Affiliates (including, without limitation,
the leasehold interests) to the intangible or tangible
assets relating to or used or intended for use primarily
in connection with the Feed Lot Business (including,
without limitation, all the assets that are to be
reflected in the Final Cattleco Closing Balance Sheet) to
be transferred and contributed to, and held solely by,
Cattleco free and clear of all Liens (other than permitted
Liens described on Schedule 7.23.1(a) and Schedule
7.23.1(b)) and other than (x) those assets to be retained
by ConAgra or its Affiliates and that are used by ConAgra
or its Affiliates to provide the services contemplated by
the Transition Services Agreement, Risk Management
Agreement, Cash Management Agreement and By-Products
Agreement and (y) those assets described on Schedule
7.15.1 or Schedule 7.21.1 or used to provide the services
described on Schedule 7.15.1 or Schedule 7.21.1. Exhibit
2.1.6 sets forth a description of the real property,
whether owned or leased, that will be transferred to
Cattleco prior to the Closing Date. As part of the
foregoing transfer obligations, ConAgra shall cause to be
recorded in the real property records of each county in
which a parcel of owned real property of Cattleco (or
which should or will be owned by
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Cattleco) is located (a) certificates of merger for
properties held in the names of any
predecessors-in-interest to Cattleco which have been
merged into Cattleco, (b) certificates of name change for
properties held in Cattleco under a previous legal name,
and (c) warranty deeds and other instruments of conveyance
for the vesting in Cattleco of title to real properties
held by Persons other than Cattleco or
predecessors-in-interest to Cattleco, and shall cause to
be assigned to Cattleco all such leasehold interests held
by such other Person. To the extent that any Licenses or
Environmental Permits relating to the Feed Lot Business
are not already issued in the name of Cattleco or a
Subsidiary of Cattleco, ConAgra shall cause such Licenses
and Environmental Permits to be transferred to or
otherwise reissued in the name of Cattleco.
2.1.7. ConAgra shall cause all the issued and outstanding capital
stock of Cattleco to be owned and held directly by
ConAgra.
2.1.8. ConAgra shall use its reasonable efforts to cause Swift &
Company, a
Delaware corporation ("U.S. Pork Company"), to
change its corporate name to "Swift Pork Company" in its
jurisdiction of incorporation and each other jurisdiction
in which it is qualified to do business as set forth in
Schedule 7.1.
2.1.9. ConAgra shall use its reasonable efforts to cause Holdco
to change its corporate name to "Swift & Company" in its
jurisdiction of incorporation and each other jurisdiction
in which it is qualified to do business as set forth on
Schedule 7.1.
2.1.10. ConAgra shall use its reasonable efforts to cause U.S.
Beef Company to change its corporate name to "Swift Beef
Company" in its jurisdiction of incorporation and each
other jurisdiction in which it is qualified to do business
as set forth on Schedule 7.1.
2.1.11. Subject to any required approval of the other member of
Better Beef LLC, which ConAgra shall use its reasonable
efforts to obtain, ConAgra shall use its reasonable
efforts to cause ConAgra Better Beef LLC, a Colorado
limited liability company ("Better Beef LLC"), to change
its entity name to "Swift Better Beef, LLC" in its
jurisdiction of formation and each other jurisdiction in
which it is qualified to do business as set forth on
Schedule 7.1.
2.1.12. [Intentionally Omitted]
2.1.13. ConAgra shall use its reasonable efforts to cause
Kabushiki Kaisha ConAgra Japan, a Japanese stock
corporation, to change its entity name to "Kabushiki
Kaisha Swift Japan" in its jurisdiction of
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formation and each other jurisdiction in which it is
qualified to do business as set forth on Schedule 7.1.
2.1.14. ConAgra shall use its reasonable efforts to cause ConAgra
Refrigerated Foods, S.A. de C.V., a corporation organized
under the laws of the United Mexican States, to change its
entity name to "Swift Refrigerated Foods, S.A. de C.V." in
its jurisdiction of formation and each other jurisdiction
in which it is qualified to do business as set forth on
Schedule 7.1.
2.1.15. ConAgra shall cause U.S. Acquisition Co. to (i)
incorporate S&C Australia Holdco Pty. Ltd. ("Australia
Acquisition Co.") by filing with the Australian Securities
& Investments Commission ("ASIC") Form 201 in the form
attached hereto as Exhibit 2.1.15(a), (ii) cause Australia
Acquisition Co.'s constitution to be in the form attached
hereto as Exhibit 2.1.15(b), (iii) cause all necessary
consents of the directors and the secretary of Australia
Acquisition Co. to be duly obtained and held, and (iv)
cause those directors to adopt the minutes in the form
attached hereto as Exhibit 2.1.15(c). After the formation
of Australia Acquisition Co., ConAgra shall cause
Australia Acquisition Co.'s constitution not to be amended
in any respect prior to the Closing.
2.1.16. ConAgra shall cause U.S. Acquisition Co. to (i)
incorporate Swift Brands Company ("Brand Holdco") by
filing with the Secretary of State of the State of
Delaware a certificate of incorporation in the form
attached hereto as Exhibit 2.1.16(a), (ii) cause Brand
Holdco's organizational minutes to be in the form attached
hereto as Exhibit 2.1.16(b), and (iii) cause Brand Holdco
to take the action set forth in such organization minutes,
including the adoption of by-laws in the form attached
hereto as Exhibit 2.1.16(c). After its formation, ConAgra
shall not permit such certificate of incorporation and
by-laws to be amended in any respect prior to the Closing.
2.1.17. Subject to Section 9.8 and the transfers contemplated by
Section 2.1.23(x), to the extent that an Acquired Company
is not the owner or lessee thereof and to the extent of
all the rights, titles and interests (including, without
limitation, leasehold interests) owned by ConAgra or an
Affiliate thereof, (taking into account such assets to be
included and excluded, as the case may be, as set forth on
Exhibit 2.1.17) ConAgra shall cause all of the rights,
titles and interests of ConAgra or any of its Affiliates
(including, without limitation, the leasehold interests)
to the intangible and tangible assets relating to or used
or intended for use primarily in connection with the
Processing Business (including, without limitation, all of
the assets that are to be reflected in the Final
Processing Closing Balance Sheet) to be transferred and
contributed to, and held solely by, U.S. Beef Company or
Australia
13
Operating Company, as applicable, free and clear of all
Liens (other than permitted Liens described on Schedule
7.23.1(a) and Schedule 7.23.1(b)) and other than (x) those
assets to be retained by ConAgra or its Affiliates and
that are used by ConAgra or its Affiliates to provide the
services contemplated by the Transition Services
Agreement, Risk Management Agreement, Cash Management
Agreement and By-Products Agreement and (y) those assets
described on Exhibit 2.1.5, Schedule 7.15.1 or Schedule
7.21.1 or used to provided the services described on
Schedule 7.15.1 or Schedule 7.21.1. Exhibit 2.1.17 sets
forth a description of the real property, whether owned or
leased, that will be transferred to U.S. Beef Company
prior to the Closing Date. As a part of the foregoing
transfer obligations, ConAgra shall cause to be recorded
in the real property records of each county in which a
parcel of owned real property of an Acquired Company (or
which should or will be owned by an Acquired Company) is
located (a) certificates of merger for properties held in
the names of predecessors-in-interest to any Acquired
Company which have been merged into an Acquired Company
(e.g., X. X. Xxxxxx, Inc. and Mid-West By-Products, Inc.),
(b) certificates of name change for properties held in
Acquired Companies under a previous legal name (e.g.,
Xxxxxxx, Inc. n/k/a ConAgra Beef Company), and (c)
warranty deeds and other instruments of conveyance for the
vesting in Acquired Companies of title to real properties
held by other Persons that are not Acquired Companies or
predecessors in interest to Acquired Companies (e.g.,
ConAgra, Inc., ConAgra Foods, Inc., ConAgra Poultry
Company, CAG Subsidiary, Inc., and ConAgra Corporation),
and shall cause to be assigned to the Acquired Companies
all such leasehold interests held by such other Persons.
To the extent that any Licenses or Environmental Permits
relating to the Processing Business (other than those
relating to Colorado Feed LLC or Better Beef LLC) are not
already issued in the name of an Acquired Company, ConAgra
shall cause such Licenses and Environmental Permits to be
transferred or otherwise reissued in the name of the
appropriate Acquired Company.
2.1.18. Prior to the Closing, ConAgra shall pay and discharge in
full or cause the Acquired Companies to pay and discharge
in full (x) all indebtedness for borrowed funds and
purchase money indebtedness owed to a non-Affiliate of
ConAgra and incurred by any Acquired Company or for which
any Acquired Company has otherwise become liable or
responsible, including, without limitation, the
indebtedness set forth on Exhibit 2.1.18, and (y) all
indebtedness for borrowed funds and purchase money
indebtedness owed to a non-Affiliate of ConAgra and
incurred by the Acquired Company or for which any Acquired
Company has become liable or responsible, pursuant to
Acquisition LP's consent, after the date of this Agreement
and prior to the Closing. As of Closing, ConAgra shall
settle and treat as equity or cause to be
14
settled and treated as equity all intercompany investments
and accounts of the Acquired Companies, as provided in
Exhibit 5.1.1, other than loans made pursuant to the
Cattleco Loan Agreement. In connection with the above
payments and discharges ConAgra shall obtain a release of
all Liens (other than Liens relating to the Cattleco
Revolver), guarantees, indemnities, bonding arrangements,
letters of credit, letters of comfort and similar
financial arrangements under which one or more of the
Acquired Companies is obligated relating to indebtedness
for borrowed funds and purchase money indebtedness.
ConAgra shall release or cause to be released (i) all
Liens held by ConAgra or any Subsidiary thereof
encumbering the assets of any Acquired Company and (ii)
any guarantees by any Acquired Company of indebtedness or
other obligations of ConAgra or any Subsidiary of ConAgra
other than any guarantees arising under the Deed of Cross
Guarantee referred to in Section 2.1.22 below. The terms
of this Section 2.1.18 shall not apply in respect to
Colorado Feed LLC or Better Beef LLC.
2.1.19. As soon as reasonably practicable and in any event prior
to the Closing, Brand Holdco shall file in the United
States, Korea, Taiwan, China and Mexico, and Australia
Meat Holdings Pty. Ltd. shall file in Australia three
intent-to-use trademark applications for the terms
"Swift," "Swift Premium," and "Swift & Company" for use
with "fresh, frozen, ground and/or processed beef, pork
and lamb, meat, meat cuts, and organs."
2.1.20. [Intentionally Omitted]
2.1.21. ConAgra shall cause ConAgra Holdings (Australia) Pty.
Ltd., an Australian corporation ("Australia Holdco"),
Burcher Pty. Limited, an Australian corporation, and
Australia Operating Company to comply in a timely manner
with all procedures set forth in Section 260B of the
Australian Corporations Act so that any financial
assistance contemplated by Section 2.2.8 can be provided
at the Closing.
2.1.22. ConAgra shall cause each of Australia Operating Company,
Burcher Pty. Limited and ConAgra Trade Group Pty. Ltd.
(formerly XX Xxxxxxxx Group Pty. Ltd.) to: (i) enter into
Revocation Deeds which revoke the Deed of Cross Guarantee
dated April 26, 1996, among Australia Operating Company,
ConAgra Trade Group Pty. Ltd. and Burcher Pty. Limited
(the "Deed of Cross Guarantee"); (ii) lodge copies of such
Revocation Deeds with the ASIC in accordance with ASIC
Class Order CO 98/1418; and (iii) give notice to their
creditors of the Revocation Deeds by way of public
advertisements in accordance with ASIC Class Order CO
98/1418.
15
2.1.23. To the extent that an Acquired Company is not currently
the owner thereof and ConAgra or an Affiliate thereof is
the owner, ConAgra shall (x) with respect to the United
States and Australia, transfer or cause to be transferred
all of ConAgra's and its Affiliates' right, title, and
interest in and to the patents, trademarks, service marks,
tradenames and domain names set forth on Exhibit 2.1.23(a)
to Brand Holdco free and clear of all Liens using the form
assignment attached hereto as Exhibit 2.1.23(b), or, with
respect to the domain names, the transfer form provided by
the appropriate domain name registrar, or, with respect to
the patents, the form assignment attached hereto as
Exhibit 2.1.23(c), and (y) with respect to all other
countries, execute and deliver or cause to be executed and
delivered to Brand Holdco assignments in the form attached
hereto as Exhibit 2.1.23(b) (for the trademarks, service
marks and tradenames) or Exhibit 2.1.23(c) (for the
patents) that have been executed by the owner of the
patents, trademarks, service marks, tradenames and domain
names set forth on Exhibit 2.1.23(a) for the purpose of
transferring all of ConAgra's and its Affiliates' right,
title, and interest therein to Brand Holdco free and clear
of all Liens, or, for the domain names, the transfer form
provided by the appropriate domain name registrar.
2.1.24. ConAgra shall transfer or cause to be transferred the
title and all rights to the Xxxx 35 Jet described on
Exhibit 2.1.24 to Xxxxxxx International Sales Corp. free
and clear of all Liens.
2.1.25. To the extent that an Acquired Company is using any trade
dress in connection with the sale of any fresh meat
products, as of the date of this Agreement, the Acquired
Company shall have the sole and exclusive right to use
such trade dress in connection with the sale of fresh meat
products. To the extent that ConAgra or any of its
Affiliates (other than an Acquired Company) are using any
trade dress in connection with the sale of any processed
meat products, as of the date of this Agreement, then
ConAgra and such Affiliates shall have the sole and
exclusive right to use such trade dress in connection with
the sale of the processed meat products. The parties shall
and shall cause their Affiliates to execute such
assignments or consents as may be reasonably required to
effectuate the intent of this Section 2.1.25, provided,
however, that any such assignments shall be made on an "as
is" basis. The provisions of this Section 2.1.25 shall not
apply to the Xxxxx 'N Serve Properties (as defined in the
Swift Transition License Agreement) which shall remain the
sole and exclusive property of ConAgra. Holdco
acknowledges ConAgra's sole ownership of the Xxxxx 'N
Serve Properties and agrees that Holdco and its Affiliates
shall be bound by the terms and conditions set forth in
Section 10 of the Swift Transition License Agreement.
16
2.1.26. Contemporaneously with the assignment of trademarks
contemplated under Section 2.1.23, to the extent that such
license agreement may be assignable under applicable Law,
ConAgra shall cause Xxxxx-Xxxxxxx, Inc. to assign to Brand
Holdco, and Brand Holdco shall accept, all rights and
obligations arising under the trademark license agreements
identified in Exhibit 2.1.26.
2.1.27. ConAgra shall cause Xxxxx-Xxxxxxx, Inc. to cancel the
trademark registrations for "Swift's Jewel & Design"
(registration number 054402) and "Swift's La Primera &
Design" (registration number 2241) in Panama.
Xxxxx-Xxxxxxx, Inc. shall retain all rights in the
trademarks "Jewel" or "La Primera." Xxxxx-Xxxxxxx, Inc.
may file new applications to register "Jewel" and "La
Primera," but shall not file any applications to register
"Swift's" or any other derivation of "Swift."
2.1.28. ConAgra shall cause Brand Holdco to file a new trademark
application for the trademark "Xxxxxx'x Blue Ribbon Beef"
in the United States Patent and Trademark Office.
2.1.29. Holdco agrees that, except as expressly set forth herein,
ConAgra and its Affiliates shall retain all right, title
and interest in all "Armour" and "Xxxxxxx" derivative
trademarks, service marks, trade names, domain names and
other business designations, including all associated "E"
logos. ConAgra agrees that, except as expressly set forth
herein, ConAgra shall assign, or cause its Affiliates to
assign, to Brand Holdco, all of their right, title and
interest in all "Swift" derivative trademarks, service
marks, trade names, domain names and other business
designations. Nothing contained herein shall be construed
as assigning, conveying or otherwise transferring to
Holdco or its Affiliates (or Brand Holdco) any right,
title or interest in the "Armour" or "Xxxxxxx" portions of
the trademarks, service marks, trade names or business
designations "Xxxxx-Xxxxxxx," "Armour Xxxxx-Xxxxxxx" or
"Xxxxx-Xxxxxxx, Inc.," nor shall anything contained herein
be construed as retaining to ConAgra or its Affiliates any
right, title or interest in the "Swift" portion of the
trademarks, service marks, trade names or business
designations "Xxxxx-Xxxxxxx," "Armour Xxxxx-Xxxxxxx" or
"Xxxxx-Xxxxxxx, Inc." Xxxxx-Xxxxxxx, Inc. may continue to
use the business designations "Xxxxx-Xxxxxxx," "Armour
Xxxxx-Xxxxxxx" and "Xxxxx-Xxxxxxx, Inc.," and any
derivation thereof, pursuant to the terms and conditions
of the Swift Transition License Agreement. Upon
termination of the Swift Transition License Agreement,
ConAgra shall cause Xxxxx-Xxxxxxx, Inc. to discontinue all
use of the trademarks, service marks, trade names and
business designations "Xxxxx-Xxxxxxx," "Armour
Xxxxx-Xxxxxxx" and "Xxxxx-Xxxxxxx, Inc." but may
thereafter use any other "Armour" or "Xxxxxxx" derivative
trademark, service
17
xxxx, trade name, domain name and business designation
that does not incorporate the word "Swift."
2.2. PAYMENT OF CONSIDERATION. ConAgra, Holdco and Acquisition LP
hereby covenant and agree to take, or cause to be taken, the
following actions at the Closing, chronologically in the order
set forth below:
2.2.1. Acquisition LP shall cause equity funding from (i) Hicks,
Muse, Xxxx & Xxxxx Equity Fund V, L.P. ("Fund V") in the
amount of Xxx Xxxxxxx Xxxxx-Xxxx Xxxxxxx Xxxxxx Xxxxxx
Dollars ($145,000,000) pursuant to the Fund V Commitment
Letter and (ii) Gillco in the amount of Fifteen Million
United States Dollars ($15,000,000) pursuant to the Gillco
Subscription Agreement (collectively, the "Acquisition LP
Funding Amount").
2.2.2. Acquisition LP shall purchase from ConAgra and ConAgra
shall sell and deliver to Acquisition LP, one hundred
seventy-five million (175,000,000) shares (the
"Acquisition LP Holdco Stock") of common stock, $0.00001
par value, of Holdco (the "Holdco Common Stock"), free and
clear of all Liens, constituting, as of the Closing Date,
53.846% (the "Acquisition LP Percentage Interest") of the
issued and outstanding shares of Holdco Common Stock, for
an aggregate cash purchase price of Xxx Xxxxxxx Xxxxx
Xxxxxxx Xxxxxx Xxxxxx Dollars ($160,000,000).
2.2.3. ConAgra shall cause Cattleco to establish additional
reserves and/or asset writedowns not to exceed Eighteen
Million United States Dollars ($18,000,000). ConAgra
shall, and shall cause Cattleco to, enter into a revolving
loan agreement in the form attached hereto as Exhibit
2.2.3 ("Cattleco Loan Agreement") pursuant to which
ConAgra shall make an initial loan to Cattleco and ConAgra
shall cause Cattleco to borrow, as of the Closing, up to
Xxx Xxxxxxx xxx Xxxxx Xxxxxxx Xxxxxx Xxxxxx Dollars
($260,000,000) (the "Cattleco Loan Amount") as an initial
advance under a revolving line of credit in an aggregate
amount of Three Hundred Fifty Million United States
Dollars ($350,000,000) (the "Cattleco Revolver"). Loans
made pursuant to the Cattleco Loan Agreement shall be
secured by a first perfected security interest in all
Cattleco assets and shall be for an initial term of
twenty-four (24) months. ConAgra shall cause Cattleco to
execute and deliver to ConAgra the deeds of trust,
security agreement, cash management agreement (the "Cash
Management Agreement") and documents contemplated by the
Cattleco Loan Agreement.
2.2.4. ConAgra shall cause Cattleco to pay ConAgra, in repayment
of preexisting intercompany indebtedness, an amount equal
to the Cattleco Loan Amount.
18
2.2.5. U.S. Beef Company shall purchase from ConAgra and ConAgra
shall sell and deliver or cause to be sold and delivered
to U.S. Beef Company one (1) share of capital stock of
ConAgra Refrigerated Foods, S.A. de C.V. (the "ConAgra
Minority Mexican Stock Interest"), free and clear of all
Liens.
2.2.6. The parties shall cause Holdco to purchase from ConAgra or
its Affiliate (other than an Acquired Company), and
ConAgra shall sell and deliver or cause its Affiliate
(other than an Acquired Company) to sell and deliver to
Holdco, all the issued and outstanding shares of capital
stock of U.S. Beef Company (the "U.S. Beef Company Stock")
and U.S. Pork Company (the "U.S. Pork Company Stock") free
and clear of all Liens. The parties shall cause Holdco to
purchase from ConAgra or its Affiliate (other than an
Acquired Company), and ConAgra shall sell and deliver or
cause its Affiliate (other than an Acquired Company) to
sell and deliver to Holdco, all the issued and outstanding
shares of capital stock of Kabushiki Kaisha ConAgra Japan
(the "KK Japan Stock"), free and clear of all Liens. The
parties shall cause Holdco to purchase from ConAgra or its
Affiliate (other than an Acquired Company), and ConAgra
shall sell and deliver or cause its Affiliate (other than
an Acquired Company) to sell and deliver to Holdco,
forty-nine thousand nine hundred ninety-nine (49,999)
shares of capital stock of ConAgra Refrigerated Foods,
S.A. de C.V., free and clear of all Liens, which, together
with the ConAgra Minority Mexican Stock Interest shall
constitute all the issued and outstanding shares of
capital stock of ConAgra Refrigerated Foods, S.A. de C.V.
(collectively, the "ConAgra Mexican Stock"). The U.S. Beef
Company Stock, U.S. Pork Company Stock, KK Japan Stock and
the ConAgra Mexican Stock shall be collectively referred
to as the "U.S. Processing Company Stock." In connection
with such purchases and issuances, the parties shall cause
the following actions to be taken:
(i) Acquisition LP shall assign to U.S. Acquisition Co.
and Australia Acquisition Co. its rights under the
Senior Bank Commitment Letter and the related Fee
Letter, U.S. Acquisition Co. and Australia
Acquisition Co. shall assume all the obligations of
Acquisition LP thereunder and Acquisition LP shall
be released from all obligations thereunder;
(ii) The parties shall cause U.S. Acquisition Co. to
enter into and request funding in the amount of Xxx
Xxxxxxx Xxxxx-Xxx Xxxxxxx Xxxxxx Xxxxxx Dollars
($141,000,000) (as such amount may be increased or
decreased, as appropriate, to reflect any increase
or decrease (w) in the amount of indebtedness
incurred as contemplated by clause (iv) below, (x)
in the amount of fees and expenses to be paid and
reimbursed pursuant to Section 15.3 as compared to
Sixty Million United
19
States Dollars ($60,000,000), (y) in the amount of
the Estimated Combined Processing Company
Stockholders Net Investment (as reduced for the
Estimated Australian Stockholder Net Investment) as
compared to the Initial Combined Processing Company
Stockholders Net Investment (as reduced for the
Initial Australian Stockholder Net Investment), and
(z) in the amount of indebtedness incurred as
contemplated by Section 2.2.8(i) as compared to Xxx
Xxxxxxx Xxxxx Xxxxxxx Xxxxxx Xxxxxx Dollars
($150,000,000)) under the loan agreement
contemplated by the Senior Bank Commitment Letter;
(iii) Acquisition LP shall assign to U.S. Acquisition Co.
its rights under (x) the Bridge Commitment Letter
and the related Fee Letter, and (y) the Engagement
Letter, and U.S. Acquisition Co. shall assume all
the obligations of Acquisition LP thereunder and
Acquisition LP shall be released from all
obligations thereunder;
(iv) The parties shall cause U.S. Acquisition Co. to
either (x) consummate the sale of debt securities
in the amount of Four Hundred Million United States
Dollars ($400,000,000) as contemplated by the
Engagement Letter (as such amount may be adjusted,
as appropriate, as contemplated by the Fee Letter)
or (y) to the extent that the debt securities
cannot be sold in such amount, request funding in
such amount under the bridge loan facility
contemplated by the Bridge Commitment Letter;
(v) The parties shall cause U.S. Acquisition Co. and
S&C Holdco 3 to enter into the promissory note in
the form attached hereto as Exhibit 2.2.6(v) (the
"S&C Holdco 3 Acquisition Note") and pursuant
thereto the parties shall cause U.S. Acquisition
Co. to loan and S&C Holdco 3 to borrow, from the
funds that U.S. Acquisition Co. received pursuant
to clause (ii) and (iv) above, an amount equal to
Four Hundred Forty-One Million United States
Dollars ($441,000,000) (as such amount may be
increased or decreased, as appropriate, to reflect
any increase or decrease (x) in the amount of the
Estimated Combined Processing Company Stockholders
Net Investment (as reduced for the Estimated
Australian Stockholder Net Investment) as compared
to the Initial Combined Processing Company
Stockholders Net Investment (as reduced for the
Initial Australian Stockholder Net Investment) and
(y) in the amount of fees and expenses to be paid
and reimbursed pursuant to Section 15.3 as compared
to Sixty Million United States Dollars
($60,000,000));
20
(vi) The parties shall cause S&C Holdco 3 and S&C Holdco
2 to enter into the promissory note in the form
attached hereto as Exhibit 2.2.6(vi) (the "S&C
Holdco 2 Acquisition Note") and pursuant thereto
the parties shall cause S&C Holdco 3 to loan and
S&C Holdco 2 to borrow the funds that S&C Holdco 3
received pursuant to the S&C Holdco 3 Acquisition
Note;
(vii) The parties shall cause S&C Holdco 2 and Holdco to
enter into the promissory note in the form attached
hereto as Exhibit 2.2.6(vii) (the "Holdco
Acquisition Note") and pursuant thereto the parties
shall cause S&C Holdco 2 to loan and Holdco to
borrow the funds that S&C Holdco 2 received
pursuant to the S&C Holdco 2 Acquisition Note;
(viii) In consideration of the U.S. Processing Company
Stock, the parties shall cause Holdco to pay to
ConAgra or its designees Three Hundred Eighty-One
Million United States Dollars ($381,000,000) (as
such amount may be increased or decreased, as
appropriate, to reflect any increase or decrease in
the amount of the Estimated Combined Processing
Company Stockholders Net Investment (as reduced for
the Estimated Australian Stockholder Net
Investment) as compared to the Initial Combined
Processing Company Stockholders Net Investment (as
reduced for the Initial Australian Stockholder Net
Investment)) of the funds received pursuant to
clause (vii) above;
(ix) In consideration of the U.S. Processing Company
Stock, the parties shall cause Holdco to execute
and deliver to ConAgra a promissory note in the
principal amount of Xxx Xxxxxxx Xxxxx Xxxxxxx
Xxxxxx Xxxxxx Dollars ($150,000,000) in the form
attached hereto as Exhibit 2.2.6(ix) (the
"Promissory Note");
(x) The parties shall cause (A) Holdco to transfer to
S&C Holdco 2 all of the U.S. Processing Company
Stock, (B) S&C Holdco 2 to execute and deliver to
ConAgra an assumption agreement in the form
attached as Exhibit 2.2.6(x) pursuant to which S&C
Holdco 2 shall assume all obligations and
liabilities of Holdco under the Promissory Note and
(C) S&C Holdco 2 to accept such transfer in full
repayment of the Holdco Acquisition Note, with such
transfer being treated as a contribution to the
capital of S&C Holdco 2 to the extent that the
value of the U.S. Processing Company Stock exceeds
the outstanding indebtedness under the Holdco
Acquisition Note;
(xi) ConAgra shall execute and deliver to Holdco a
release in the form attached hereto as Exhibit
2.2.6(x) releasing Holdco from
21
all obligations and liabilities of Holdco under the
Promissory Note;
(xii) The parties shall cause (A) S&C Holdco 2 to
transfer to S&C Holdco 3 all of the U.S. Processing
Company Stock that it received pursuant to clause
(x) above, and (B) S&C Holdco 3 to accept such
transfer in full repayment of the S&C Holdco 2
Acquisition Note, with such transfer being treated
as a contribution to the capital of S&C Holdco 3 to
the extent that the value of the U.S. Processing
Company Stock exceeds the outstanding indebtedness
under the S&C Holdco 2 Acquisition Note; and
(xiii) The parties shall cause (A) S&C Holdco 3 to
transfer to U.S. Acquisition Co. all of the U.S.
Processing Company Stock that it received pursuant
to clause (xii) above, and (B) U.S. Acquisition Co.
to accept such transfer in full repayment of the
S&C Holdco 3 Acquisition Note, with such transfer
being treated as a contribution to the capital of
U.S. Acquisition Co. to the extent that the value
of the U.S. Processing Company Stock exceeds the
outstanding indebtedness under the S&C Holdco 3
Acquisition Note.
2.2.7. The parties shall cause Cattle Holdco to purchase from
ConAgra, and ConAgra shall sell and deliver to Cattle
Holdco, all the issued and outstanding shares of capital
stock of Cattleco (the "Cattleco Stock") free and clear of
all Liens for an initial purchase price of Thirty Million
United States Dollars ($30,000,000) (the "Cattleco Stock
Purchase Price"). As additional consideration, if, and
only if, the HMC Group (as defined in the Stockholders
Agreement) exercises the HMC Call Option (as defined in
the Stockholders Agreement) prior to the complete
Divestiture of the Feed Lot Business, Cattleco shall pay
to ConAgra an amount equal to the "Additional
Consideration." The Additional Consideration shall be an
amount equal to the product of (A) the aggregate amount of
consolidated net income of Cattle Holdco and its
subsidiary as calculated from the Closing Date through the
end of the last calendar month immediately prior to the
date on which the closing of the HMC Call Option occurs
(minus the value of any cash dividends paid or declared by
Cattle Holdco prior to the closing date of the HMC Call
Option) multiplied by (B) the CAGCO Ownership Percentage
(as defined in the Stockholders Agreement). The parties
shall cause Cattleco Holdco to pay to ConAgra the Cattleco
Stock Purchase Price by delivering to ConAgra a promissory
note in the stated aggregate principal amount of Eighty
Million United States Dollars ($80,000,000) in the form
attached to the Cattleco Loan Agreement (the "Cattleco
Note") of which $30,000,000 million is deemed advanced as
the initial purchase price as of the date of
22
delivery. If any Additional Consideration is owed such
amount shall be deemed to be an additional advance under
the Cattleco Note. The initial stated principal amount of
the Cattleco Note may be increased as necessary to reflect
the Additional Consideration, all as otherwise described
in Section 2(b)(1) of the Cattleco Loan Agreement.
2.2.8. The parties shall cause Australia Acquisition Co. to
purchase from Australia Holdco, and ConAgra shall cause
Australia Holdco to sell and deliver to Australia
Acquisition Co., all the issued and outstanding shares of
capital stock of Australia Operating Company (the
"Australia Operating Company Stock" and collectively with
the U.S. Processing Company Stock, the "Processing Company
Stock"), free and clear of all Liens. In connection with
such purchase, the parties shall cause the following
actions to be taken:
(i) The parties shall cause Australia Acquisition Co.
to enter into and request funding in the amount of
Xxx Xxxxxxx Xxxxx Xxxxxxx Xxxxxx Xxxxxx Dollars
($150,000,000) (or such greater or lesser amount as
may be necessary and that may be available for
borrowing) under the loan agreement contemplated by
the Senior Bank Commitment Letter, provided that
the amount to be borrowed under this clause (i)
shall not exceed seventy-five percent (75%) of the
amount to be paid pursuant to clause (iii) below.
(ii) From the proceeds received pursuant to clauses (ii)
and (iv) of Section 2.2.6 above, the parties shall
cause U.S. Acquisition Co., (A) to loan to
Australia Acquisition Co. and the parties shall
cause Australia Acquisition Co. to borrow, pursuant
to the promissory note in the form attached hereto
as Exhibit 2.2.8, an amount equal to the amount to
be paid pursuant to clause (iii) below minus the
sum of (x) the amount borrowed pursuant to clause
(i) above and (y) the amount to be contributed
pursuant to clause (B) of this (ii), and (B) to
contribute to the capital of Australia Acquisition
Co. an amount equal to twenty-five percent (25%) of
the amount to be paid pursuant to clause (iii)
below.
(iii) In consideration of the Australia Operating Company
Stock, the parties shall cause Australia
Acquisition Co. to pay to Australia Holdco Two
Hundred Fifty Million United States Dollars
($250,000,000) (as such amount may be increased or
decreased, as appropriate, to reflect any increase
or decrease in the amount of the Estimated
Australian Stockholder Net Investment as compared
to the Initial Australian Stockholder Net
Investment) from the proceeds received from clauses
(i) and (ii) above.
23
3. AGGREGATE CONSIDERATION.
3.1. PROCESSING COMPANY PURCHASE PRICE.
3.1.1. For purposes of the transactions contemplated herein, the
aggregate consideration to be received by ConAgra and
Australia Holdco under Article 2 in respect of the
Acquired Companies (other than Cattleco) shall be an
amount equal to the Combined Processing Company
Stockholders Net Investment (as defined in Section 5.1.7)
plus Eighteen Million United States Dollars ($18,000,000)
(the "Aggregate Consideration"). The Aggregate
Consideration shall be payable as provided in Articles 2
and 3 and shall be subject to adjustment as set forth in
Article 5. For purposes of determining payment of the
Aggregate Consideration and the other provisions of this
Agreement, the aggregate value of the common stock of
Holdco shall be deemed to equal Three Hundred Twenty-Five
Million United States Dollars ($325,000,000) out of which
the post-Closing ownership interest of ConAgra in the
common stock of Holdco shall have a deemed value of Xxx
Xxxxxxx Xxxxx Xxxxxxx Xxxxxx Xxxxxx Dollars
($150,000,000). For purposes of this Agreement (including
clause (iii) of Section 2.2.8), an amount of the Aggregate
Consideration shall be allocated to the Australian
Operating Common Stock equal to the product of (x) the
Aggregate Consideration minus Eighteen Million United
States Dollars ($18,000,000) times (y) a fraction (1) the
numerator of which is the Australian Stockholder Net
Investment as set forth in the Final Australian Closing
Balance Sheet and (2) the denominator of which is the
Combined Processing Company Stockholders Net Investment as
set forth in the Final Processing Closing Balance Sheet.
As of the date of this Agreement, the parties estimate (x)
that the Combined Processing Company Stockholders Net
Investment (which includes the Initial Australian
Stockholder Net Investment) is approximately Xxx Xxxxxxx
Xxxxxxx-Xxxxx Xxxxxxx Xxxxxx Xxxxxx Dollars
($1,073,000,000) (the "Initial Combined Processing Company
Stockholders Net Investment") and (y) the Australian
Stockholder Net Investment is approximately Two Hundred
Fifty Million United States Dollars ($250,000,000) (the
"Initial Australian Stockholder Net Investment").
3.1.2. On the fourth business day prior to the Closing Date,
ConAgra shall prepare and deliver, in accordance with the
terms of this Section 3.1.2, an estimated combined balance
sheet for the Acquired Companies (excluding Cattleco) (the
"Estimated Processing Company Closing Balance Sheet"),
together with a separate estimated combined balance sheet
for Australia Operating Company (the "Estimated Australian
Closing Balance Sheet"), in each case estimated as of
12:01 a.m. New York City time on the Closing Date. ConAgra
shall prepare the Estimated Processing Company Closing
Balance Sheet and the Estimated Australian Closing Balance
Sheet in accordance with GAAP
24
and the methodology, procedures and manner of presentation
set forth in Section 5.1.1 and Exhibit 5.1.1. Acquisition
LP and its representatives shall have the right to consult
with ConAgra in connection with the preparation of the
Estimated Processing Company Closing Balance Sheet and
such Estimated Australian Closing Balance Sheet, but shall
not have the right to approve such Estimated Processing
Company Closing Balance Sheet and Estimated Australian
Closing Balance Sheet. The parties acknowledge and agree
that the amounts set forth in Sections 2.2.6(ii),
2.2.6(v), 2.2.6(viii), 2.2.8(i), 2.2.8(ii) and 2.2.8(iii)
have been calculated based on the Initial Combined
Processing Company Stockholders Net Investment and the
Initial Australian Stockholder Net Investment. For
purposes of borrowings and payments made at the Closing
pursuant to such Sections, the estimated Combined
Processing Company Stockholders Net Investment as
reflected in the Estimated Processing Company Closing
Balance Sheet (the "Estimated Combined Processing Company
Stockholders Net Investment") and the estimated Australian
Stockholder Net Investment as reflected in the Estimated
Australian Closing Balance Sheet (the "Estimated
Australian Stockholder Net Investment"), shall be used as
provided therein.
3.2. FORM OF CASH PAYMENTS. All payments pursuant to Article 2
shall be made by wire transfer of immediately available funds
to the account designated by the receiving party.
3.3. PURCHASE PRICE ALLOCATION. Within thirty (30) days after the
later of (i) the determination of the Processing Company
Settlement Payment pursuant to Section 5.1.4 and (ii) the
determination of the Cattleco Settlement Payment pursuant to
Section 5.1.5, Deloitte shall prepare and provide ConAgra and
Holdco with an allocation of the purchase price (pursuant to
the principles of Exhibit 3.3) with respect to the Processing
Company Stock, the Cattleco Stock and the other assets
acquired by Holdco or its Subsidiaries pursuant to this
Agreement. The parties hereto agree to use the allocation
provided by Deloitte consistent with and pursuant to this
Section 3.3 for their Tax reporting purposes. The parties
hereto agree that the transfers of the Processing Company
Stock and the Cattleco Stock shall be reported as taxable
sales or exchanges of such stock (and not of such companies'
underlying assets) for Income Tax purposes. Any other assets
(other than cash or cash equivalents) transferred to Holdco or
a Subsidiary of Holdco pursuant to Sections 2.1.6, 2.1.17,
2.1.23 or 2.1.24 shall be reported as taxable sales or
exchanges of such assets for Income Tax purposes.
4. CLOSING.
4.1. CLOSING. Subject to the terms and conditions contained in this
Agreement, the closing of the transactions contemplated hereby
(the "Closing") will
25
occur at the offices of Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the earlier of (i) the
Termination Date, and (ii) the second business day after the
conditions set forth in Section 10 (other than those to be
fulfilled at the Closing) have been satisfied or at such other
date and place as the parties hereto may mutually agree (the
date on which the Closing actually occurs being referred to
herein as the "Closing Date"). The Closing shall be effective
as of the time on the Closing Date that all actions
contemplated to occur at the Closing pursuant to this
Agreement have been completed (the "Effective Time").
4.1.1. OBLIGATIONS AT THE CLOSING. In addition to the actions
contemplated by Article 2, at the Closing the parties
shall cause the following actions to be taken:
(i) INDEMNIFICATION AND RELEASE AGREEMENT. Holdco shall
execute and deliver, and cause each Acquired
Company (other than Colorado Feed LLC and Better
Beef LLC) and Acquiring Company to execute and
deliver, to ConAgra the indemnification and release
agreement, in the form attached hereto as Exhibit
4.1.1(i) (the "Indemnification and Release
Agreement"), pursuant to which each of the Acquired
Companies (other than Colorado Feed LLC and Better
Beef LLC) and Acquiring Companies agrees to be
bound, jointly and severally, by each of the
covenants with respect to periods following the
Closing and indemnification obligations of Holdco
set forth in this Agreement and to release ConAgra
from certain environmental claims as set forth
therein.
(ii) PREFERRED SUPPLIER AGREEMENT. ConAgra shall execute
and deliver and Holdco shall execute and deliver a
preferred supplier agreement in the form attached
hereto as Exhibit 4.1.1(ii) pursuant to which the
Processing Companies (other than Colorado Feed LLC
and Better Beef LLC) agree to supply certain
products to ConAgra and its Subsidiaries, and
ConAgra and its Subsidiaries agree to purchase
certain products, at market prices on a delivered
basis and terms (the "Preferred Supplier
Agreement").
(iii) STOCKHOLDERS AGREEMENT. ConAgra, Acquisition LP and
Holdco shall execute and deliver a stockholders
agreement in the form attached hereto as Exhibit
4.1.1(iii) pursuant to which the parties agree to
certain governance provisions including, without
limitation, board representation, share transfer
restrictions, registration rights and other
stockholder rights (the "Stockholders Agreement").
Pursuant to the Stockholders Agreement, Acquisition
LP shall have certain rights to acquire ConAgra's
equity interests in Holdco, and ConAgra shall have
26
the right to participate in certain transfers by
Acquisition LP of its equity interest. In addition,
ConAgra shall use its reasonable efforts for at
least eighteen (18) months following Closing to
solicit purchasers for Cattleco operations.
(iv) TRANSITION SERVICES AGREEMENT. ConAgra shall
execute and deliver and Holdco shall cause the
Acquired Companies (other than Colorado Feed LLC
and Better Beef LLC) to execute and deliver a
transition services agreement in the form attached
hereto as Exhibit 4.1.1(iv) (the "Transition
Services Agreement") pursuant to which (i) ConAgra
agrees to provide certain transition services to
the Acquired Companies (other than Colorado Feed
LLC and Better Beef LLC) following Closing, (ii)
U.S. Beef Company agrees to provide certain
transition services to ConAgra following Closing
and (iii) ConAgra agrees to provide certain
transition services to Cattleco following the
Closing.
(v) ARMOUR TRANSITION TRADEMARK LICENSE AGREEMENT.
ConAgra shall or shall cause its appropriate
Affiliates to execute and deliver and Holdco shall
cause the appropriate Acquired Companies to execute
and deliver a transition trademark license
agreement in the form attached hereto as Exhibit
4.1.1(v) (the "Armour Transition License
Agreement") pursuant to which ConAgra or such
Affiliates agree to license to the Acquired
Companies (other than Colorado Feed LLC and Better
Beef LLC) the "Armour" and "ConAgra" trademarks and
business names on a transition basis.
(vi) SWIFT TRANSITION TRADEMARK LICENSE AGREEMENT.
Holdco shall cause the appropriate Acquired Company
(other than Colorado Feed LLC and Better Beef LLC)
to execute and deliver and ConAgra shall execute
and deliver a transition trademark license
agreement in the form attached hereto as Exhibit
4.1.1(vi) (the "Swift Transition License
Agreement") pursuant to which such Acquired Company
agrees to license to ConAgra the "Swift" and "Swift
Premium" trademarks on a transition basis.
(vii) HANGAR LICENSE AGREEMENT. U.S. Beef Company and
ConAgra shall execute and deliver a Hangar License
Agreement in the form attached hereto as Exhibit
4.1.1(vii) (the "Hangar License Agreement"),
relating to the joint use of certain hangar space
located in Greeley, Colorado.
(viii) DIRECTOR APPOINTMENT. The parties acknowledge that
Holdco shall have a seven (7) member board of
directors, five (5) of
27
whom shall be designated by Acquisition LP and two
(2) of whom shall be designated by ConAgra. At
Closing, ConAgra and Acquisition LP shall take all
action necessary to establish such board, and
designate such members.
(ix) RISK MANAGEMENT AGREEMENT. ConAgra shall execute
and deliver and Holdco shall cause Cattleco to
execute and deliver the Risk Management Agreement
in the form attached hereto as Exhibit 4.1.1(ix)
(the "Risk Management Agreement") pursuant to which
ConAgra shall provide certain risk management
services to Cattleco, and Cattleco shall undertake
certain risk management activities.
(x) CATTLE SUPPLY AGREEMENT. Holdco shall cause
Cattleco and U.S. Beef Company to execute and
deliver the Cattle Supply Agreement in the form
attached hereto as Exhibit 4.1.1(x) (the "Cattle
Supply Agreement") pursuant to which U.S. Beef
Company agrees to purchase, and Cattleco agrees to
supply, live cattle.
(xi) MONITORING AND OVERSIGHT AGREEMENT. Holdco, the
other Acquiring Companies and certain Acquired
Companies shall execute and deliver to Xxxxx, Muse
& Co. Partners, L.P. a monitoring and oversight
agreement in the form attached hereto as Exhibit
4.1.1(xi).
(xii) FINANCIAL ADVISORY AGREEMENT. Holdco, the other
Acquiring Companies and certain Acquired Companies
shall execute and deliver to Xxxxx, Muse & Co.
Partners, L.P. a financial advisory agreement in
the form attached hereto as Exhibit 4.1.1(xii) (the
"Financial Advisory Agreement").
(xiii) STOCK CERTIFICATES. ConAgra shall deliver to Holdco
stock certificates representing the U.S. Processing
Company Stock, in each case, duly endorsed in blank
or accompanied by stock powers duly endorsed in
blank (or equivalent transfer documents under the
Laws of the applicable country). ConAgra shall
deliver to Cattle Holdco stock certificates
representing the Cattleco Stock, duly endorsed in
blank or accompanied by stock powers duly endorsed
in blank; ConAgra shall cause Australia Holdco to
deliver to Australia Acquisition Co. share
certificates representing the Australia Operating
Company Stock and share transfer forms.
(xiv) ACQUISITION LP HOLDCO STOCK. ConAgra shall deliver
to Acquisition LP a stock certificate representing
the Acquisition
28
LP Holdco Stock duly endorsed in blank or
accompanied by stock powers duly endorsed in blank.
(xv) CERTIFICATE. ConAgra shall execute and deliver the
certificates contemplated in Sections 10.2(a) and
10.2(b).
(xvi) CERTIFICATE. Acquisition LP shall execute and
deliver the certificates contemplated in Sections
10.3(a) and 10.3(b).
(xvii) RESIGNATIONS. ConAgra shall deliver to Holdco
written resignations of the directors (or
equivalent positions) of each Acquiring Company and
Acquired Company (other than Colorado Feed LLC and
Better Beef LLC) (other than directors ConAgra is
entitled to designate under Section 4.1.1(viii)),
together with the written resignations of the
officers (or equivalent positions) of each
Acquiring Company and Acquired Company (other than
Colorado Feed LLC and Better Beef LLC) as
designated by Acquisition LP at least five (5) days
prior to the Closing Date.
(xviii) REAL PROPERTY; TITLE INSURANCE. ConAgra shall
deliver to Acquisition LP, with respect to the
parcels of real property set forth on Schedule
7.23.1(a) and Schedule 7.23.1(b), (a) original ALTA
form owner policies of title insurance insuring the
title of the Acquired Companies in the properties
designated on Schedule 7.23.1(a) to be good and
marketable, including access, contiguity and
comprehensive endorsements, (b) a certificate of
title for each property listed in Schedule
7.23.1(b) for which a certificate of title has been
issued showing that an Acquired Company is the
registered proprietor under the applicable state
registration system, (c) ALTA/ACSM Land Title
Surveys, including items 2-4, 6, 7(a) and (c) and
8-11 of Table A of the Standards (or land title
surveys prepared in accordance with equivalent
standards with respect to real property listed on
Schedule 7.23.1(b)), updated not earlier than
ninety (90) days prior to the Closing, and (d) such
other related title documents and certificates
required by the Senior Bank Commitment Letter and
the Bridge Commitment Letter, the cost and expense
of which in each case shall be paid by ConAgra and
shall be reimbursed by Holdco at the Closing
subject to Section 15.3.
(xix) BY-PRODUCTS MARKETING AGREEMENT. ConAgra shall
cause ConAgra Trade Group, Inc. to execute and
deliver and Holdco shall cause U.S. Acquisition Co.
to execute and deliver the By-Products Marketing
Agreement in the form attached hereto as Exhibit
4.1.1(xix) (the "By-Products Agreement"), pursuant
to
29
which ConAgra Trade Group, Inc. agrees to purchase
certain products.
(xx) TRANSFER RESTRICTION AGREEMENT. ConAgra shall
execute and deliver an agreement, in a form
attached hereto as Exhibit 4.1.1(xx), pursuant to
which ConAgra shall agree to certain restrictions
as set forth in the Senior Bank Commitment Letter.
(xxi) LICENSE AGREEMENT. Holdco shall cause Brand Holdco
to execute and deliver and ConAgra shall execute
and deliver a patent license agreement reasonably
satisfactory to the parties, pursuant to which
Brand Holdco shall grant to ConAgra and its
Affiliates a perpetual, world-wide, royalty-free
license to use the technology described in Patent
No. 6,133,321 only with respect to poultry. This
license shall be exclusive with respect to poultry
and shall be non-transferable, except upon the sale
of all or substantially all of ConAgra's poultry
assets. Neither party shall be required to make any
representations or warranties of any kind to the
other pursuant to such license agreement.
5. POST-CLOSING MATTERS.
5.1. CLOSING BALANCE SHEETS.
5.1.1. PREPARATION. As soon as reasonably practicable following
the Closing Date (but in any event within thirty (30) days
after the Closing), ConAgra shall prepare, in accordance
with the terms of this Article 5, (i) a combined balance
sheet for the Acquired Companies (excluding Cattleco) (the
"Preliminary Processing Company Closing Balance Sheet"),
together with a separate combined balance sheet for
Australia Operating Company (the "Preliminary Australian
Closing Balance Sheet"), in each case estimated as of
12:01 a.m. New York City time on the Closing Date and (ii)
a balance sheet for Cattleco as of 12:01 a.m. New York
City time on the Closing Date (the "Preliminary Cattleco
Closing Balance Sheet"). Such balance sheets are
collectively referred to as the "Preliminary Closing
Balance Sheets." ConAgra shall prepare the Preliminary
Closing Balance Sheets in accordance with GAAP, and the
methodology, procedures and manner of presentation set
forth in Exhibit 5.1.1. It is expressly acknowledged by
the parties hereto that the inclusion of items 13 and 14
on Schedule 7.8.2 shall not in any manner prejudice or
otherwise constitute a waiver of any party's rights under
this Article 5 or constitute an admission by a party that
such actions are permitted under this Article 5 or Exhibit
5.1.1 hereto. Immediately upon completion of the
Preliminary Closing Balance Sheets, ConAgra shall submit
the
30
Preliminary Closing Balance Sheets to Deloitte & Touche
LLP ("Deloitte") for audit in accordance with the terms of
this Article 5.
5.1.2. DELOITTE ENGAGEMENT AND AUDIT. Promptly following the
execution of this Agreement, ConAgra and Acquisition LP
shall jointly engage Deloitte, pursuant to the engagement
letter in substantially the form attached hereto as
Exhibit 5.1.2(a), to (i) audit the Preliminary Closing
Balance Sheets in accordance with GAAP and the provisions
of this Agreement, including, without limitation, Exhibit
5.1.1 (the "Audit"), and (ii) upon completion of the
Audit, deliver to ConAgra and Acquisition LP its draft
preliminary audit reports in the form attached hereto as
Exhibit 5.1.2(b) (the "Report") together with the
accompanying draft audited combined balance sheet for the
Acquired Companies (excluding Cattleco) (the "Audited
Processing Closing Balance Sheet"), the accompanying draft
audited combined balance sheet for Australia Operating
Company (the "Audited Australian Closing Balance Sheet")
and the accompanying audited balance sheet for Cattleco
(the "Audited Cattleco Closing Balance Sheet"). The
Audited Processing Closing Balance Sheet, the Audited
Australian Closing Balance Sheet and Audited Cattleco
Closing Balance Sheet are herein collectively referred to
as the "Audited Closing Balance Sheets." The parties
acknowledge and agree that Deloitte shall not issue its
final audit report until all Notices of Objection have
been resolved in accordance with Section 5.1.3 and such
resolution is incorporated into the Audited Closing
Balance Sheets.
5.1.3. OBJECTIONS; RESOLUTION OF DISPUTES. (i) Unless Acquisition
LP notifies ConAgra in writing, within thirty (30) days
after Deloitte's delivery of the Audited Closing Balance
Sheets, of any objection to the computations set forth
therein (the "Notice of Objection"), the Audited Closing
Balance Sheets shall become final and binding. Any such
objection shall be limited to matters concerning (x)
mathematical errors or (y) the Audited Closing Balance
Sheets not having been calculated or prepared in
accordance with this Agreement, including, without
limitation, Exhibit 5.1.1. During such 30-day period
Acquisition LP and its representatives shall be permitted
to review the working papers of ConAgra and Deloitte
relating to the Audited Closing Balance Sheets. Any Notice
of Objection shall specify in reasonable detail the basis
for the objections set forth therein.
(ii) If Acquisition LP provides the Notice of Objection
to ConAgra within such 30-day period, Acquisition
LP and ConAgra shall, during the 30-day period
following ConAgra's receipt of the Notice of
Objection, attempt in good faith to resolve
Acquisition LP's objections. During such 30-day
period, ConAgra and its representatives shall be
permitted to review the working papers relating to
the Notice of Objection and the
31
basis therefor. If Acquisition LP and ConAgra are
unable to resolve all such objections within such
30-day period, the matters remaining in dispute
shall be submitted to KPMG LLP (or, if such firm
declines to act, to another nationally recognized
public accounting firm mutually agreed upon by
Acquisition LP and ConAgra and, if Acquisition LP
and ConAgra are unable to so agree within ten (10)
days after the end of such 30-day period, then
Acquisition LP and ConAgra shall each select such a
firm and such firms shall jointly select a third
nationally recognized firm to resolve the disputed
matters (such selected firm being the "Independent
Expert")). The parties shall instruct the
Independent Expert to render its reasoned written
decision as promptly as practicable but in no event
later than sixty (60) days after its selection. The
resolution of disputed items by the Independent
Expert shall be final and binding, and the
determination of the Independent Expert shall
constitute an arbitral award that is final, binding
and nonappealable and upon which a judgment may be
entered by a court having jurisdiction thereover.
The fees and expenses of the Independent Expert
shall be borne by U.S. Acquisition Co. Promptly
following the respective date that ConAgra and
Acquisition LP reach agreement upon or, if
applicable, the respective date of the final
determination, the parties shall cause such
resolution to be incorporated into the Audited
Closing Balance Sheets and shall cause Deloitte to
issue its final audit report. The Audited
Processing Company Closing Balance Sheet, as
adjusted (the "Final Processing Closing Balance
Sheet"), the Audited Australian Closing Balance
Sheet, as adjusted (the "Final Australian Closing
Balance Sheet"), and the Audited Cattleco Closing
Balance Sheet, as adjusted (the "Final Cattleco
Closing Balance Sheet"), shall be final, binding
and conclusive for all purposes hereunder.
5.1.4. PROCESSING COMPANY SETTLEMENT PAYMENT. On the fourth
business day following delivery of the Final Processing
Closing Balance Sheet pursuant to this Section 5, (i)
Holdco shall pay or cause to be paid to ConAgra or its
designee the amount, if any, by which the Combined
Processing Company Stockholders Net Investment set forth
in the Final Processing Closing Balance Sheet exceeds the
Estimated Processing Company Stockholders Net Investment,
(ii) ConAgra or its designee shall pay to Holdco the
amount, if any, by which the Estimated Processing Company
Stockholders Net Investment exceeds the Combined
Processing Company Stockholders Net Investment set forth
in the Final Processing Closing Balance Sheet, and (iii)
the party making the payment pursuant to (i) or (ii) above
shall also pay interest
32
on such amount from the Closing Date through the date of
payment at the Prevailing Rate.
5.1.5. CATTLECO SETTLEMENT PAYMENT. Effective as of the agreement
upon or determination of the Final Cattleco Closing
Balance Sheet, to the extent, if any, that the Cattleco
Stockholder Net Investment set forth therein (after giving
effect to Cattleco Loan Amount) is (i) less than Thirty
Million United States Dollars ($30,000,000), then the
Cattleco Loan Amount shall be deemed reduced by the amount
of such shortfall and (ii) more than Thirty Million United
States Dollars ($30,000,000), then the Cattleco Loan
Amount shall be deemed increased by the amount of such
excess. Any such adjustment to the Cattleco Loan Amount
shall solely be for purposes of determining the
outstanding balance thereof and shall be retroactive to
the date of the initial borrowing of the Cattleco Loan
Amount and the Cattleco Loan Amount shall be deemed to
have been adjusted as of such date and for all periods
thereafter and for all purposes, including interest paid
or accrued under the Cattleco Loan Agreement.
5.1.6. ACCESS; FEES. After the Closing, Holdco shall provide, and
shall cause the Acquired Companies to provide, to ConAgra
and Deloitte such assistance and access to books, records
and other supporting documents as is necessary to timely
prepare the Preliminary Closing Balance Sheets, conduct
the Audit and prepare, issue and deliver the Report and
the Audited Closing Balance Sheets, including, but not
limited to, access to each Acquired Company's employees
and books, records and other supporting documents. ConAgra
shall provide to Deloitte such assistance and access to
books, records and other supporting documents as is
necessary for Deloitte to timely conduct the Audit and
prepare, issue and deliver the Report and the Audited
Closing Balance Sheets. Holdco shall pay or cause to be
paid all of the fees and expenses of Deloitte in
connection with the Audit and the Report.
5.1.7. CERTAIN DEFINITIONS. (i) For purposes of this Agreement,
"Combined Processing Company Stockholders Net Investment"
shall mean the stockholders' net investment and advances
as reflected in a combined balance sheet for the Acquired
Companies (excluding Cattleco) as of 12:01 a.m. New York
City time on the Closing Date in accordance with Exhibit
5.1.1.
(ii) For purposes of this Agreement, "Cattleco
Stockholder Net Investment" shall mean the
stockholder's net investment and advances as
reflected in a balance sheet for Cattleco as of
12:01 a.m. New York City time on the Closing Date
prepared in accordance with Exhibit 5.1.1.
33
(iii) For purposes of this Agreement, "Australian
Stockholder Net Investment" shall mean the
stockholder's net investment and advances as
reflected in a combined balance sheet for Australia
Operating Company as of 12:01 a.m. Australian time
on the Closing Date in accordance with Exhibit
5.1.1.
6. EMPLOYEE MATTERS.
6.1. GENERAL. As of the Effective Time, by virtue of the
transactions contemplated herein, each Acquired Company shall
continue to employ each individual employed by an Acquired
Company on the Closing Date (including employees absent from
work due to short-term or long-term disability, sick leave,
military leave or other permitted absences) (the "Company
Employees"). As of the Effective Time, ConAgra shall
terminate, or shall cause its Affiliates (that are not
Acquired Companies) to terminate, those employees who are not
employed by Acquired Companies but who are employed at
locations at which the Businesses are located and who perform
substantially all of their services for the Businesses,
including, without limitation, those management employees
listed on Exhibit 6.1, and Holdco, an Acquired Company, or a
Subsidiary thereof shall offer such employees employment. Upon
such employees' acceptance of employment with Holdco, an
Acquired Company, or a Subsidiary thereof, these employees
shall be included in the term "Company Employees."
Notwithstanding the foregoing, nothing contained in this
Agreement shall prohibit Holdco, any Acquired Company or a
Subsidiary of either from terminating or changing the terms of
employment of any Company Employee after the Effective Time.
ConAgra and its Affiliates (that are not Acquired Companies)
hereby waive any claims against Holdco, any Acquired Company
and any Subsidiary of either, and against any Company
Employee, as a result of such Company Employee's employment
with Holdco, any Acquired Company or a Subsidiary of either,
including any claims under any employment agreement,
confidentiality agreement (to the extent such confidential
information relates to the Businesses and not to other
businesses of ConAgra and its Affiliates (that are not
Acquired Companies)) or non-competition agreement.
6.2. NON-SOLICITATION. For a period of twenty-four (24) months from
the Closing Date, without the written consent of Holdco,
ConAgra shall not, and shall cause its Affiliates (that are
not Acquired Companies) to not, solicit for employment, hire
or retain in any capacity, or dissuade (prior to the Closing
or after the Closing during such twenty-four (24) month
period) from continuing or accepting employment with Holdco or
a Subsidiary thereof, any Company Employee or individual who
(i) performed services for the Businesses prior to the
Effective Time, (ii) is offered employment in accordance with
Section 6.1 and (iii) receives stock options in Holdco on the
Closing Date. Holdco shall provide
34
ConAgra with notice of such covered individuals on the Closing
Date. Notwithstanding the foregoing, if any such Company
Employee's employment terminates with Holdco or a Subsidiary
thereof, ConAgra may hire such Company Employee; provided,
however, that such hiring shall be prohibited by this Section
6.2 if ConAgra solicits the Company Employee prior to the
Company Employee's termination.
6.3. COBRA. Holdco and the Acquired Companies shall be responsible
for perpetuating the group health plan continuation coverage
pursuant to Section 4980B of the Code and Sections 601-609 of
the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), for Company Employees and their eligible
dependents.
6.4. PENSION PLAN. As of the Closing Date, Company Employees shall
cease to actively participate in any Employee Plan subject to
Title IV of ERISA that is not a multiemployer plan within the
meaning of Section 3(37) of ERISA (a "Multiemployer Plan") and
that is sponsored by ConAgra or any Affiliate (the "ConAgra
Pension Plans"), and will receive no further benefit accruals
under the ConAgra Pension Plans. ConAgra shall cause Company
Employees to be one hundred percent (100%) vested in their
accrued benefits under the ConAgra Pension Plans effective as
of the Closing Date.
6.5. 401(k) PLANS. As of the Closing Date, Company Employees shall
cease to actively participate in the ConAgra Retirement Income
Savings Plan and the ConAgra Retirement Income Savings Plan
for Hourly Rate Production Employees (the "ConAgra 401(k)
Plans"). No contributions shall be made to the ConAgra 401(k)
Plans for the benefit of Company Employees with respect to
compensation earned by the Company Employees after the Closing
Date. ConAgra shall cause the interests of the Company
Employees in the ConAgra 401(k) Plans to be one hundred
percent (100%) vested and fully nonforfeitable as of the
Closing Date. Except as expressly set forth herein, no assets
of any Employee Plan shall be transferred to Holdco or any of
its Affiliates or to any plan of Holdco or any of its
Affiliates. As soon as practical following receipt by Holdco
and ConAgra of favorable determination letters or Holdco's
certification to ConAgra, and ConAgra's certification to
Holdco, in a manner reasonably acceptable to both ConAgra and
Holdco, that Holdco's 401(k) plan and ConAgra's 401(k) Plans
are qualified under the applicable provisions of the Code,
ConAgra shall cause the trustee of ConAgra's 401(k) Plans to
transfer, solely in the form of cash or notes representing
outstanding participant loans (provided, however, at Holdco's
reasonable election, some assets may be transferred in kind),
assets representing the full account balances of the Company
Employees, together with the appropriate net investment return
(including unrealized appreciation or depreciation) thereon,
reduced by any necessary benefit or withdrawal payments made
in respect of Company Employees prior to the actual date
35
of transfer, to the trustee of Holdco's 401(k) plan, and upon
such transfer, Holdco and Holdco's 401(k) plan shall be
responsible for proper administration of such account balances
and the related liability to the Company Employees.
6.6. WELFARE PLANS. Except as otherwise set forth in the Transition
Services Agreement, as of the Closing Date, Company Employees
shall cease to participate in any plan or program described in
Section 3(1)(A) of ERISA (other than a plan, fund or program
established or maintained for the purpose of providing
unemployment, severance or worker's compensation benefits),
including foreign plans not subject to ERISA ("Welfare Plan"),
sponsored by ConAgra or any Affiliate of ConAgra that is not
an Acquired Company. Holdco shall provide those Welfare Plans
to the Company Employees as Holdco deems appropriate after the
Closing Date. ConAgra shall be responsible for and shall pay,
or shall cause to be paid or shall cause its Welfare Plans to
be responsible for and pay (subject to their terms), all
claims incurred by the Company Employees and their
beneficiaries on or before the Closing Date (whether or not
reported as of the Closing Date) under any Welfare Plan
(whether those claims are incurred under a Welfare Plan
sponsored by ConAgra, an Acquired Company, or a Subsidiary of
either) and Holdco shall be responsible for and shall pay or
cause to be paid, or shall cause its Welfare Plans to be
responsible for and pay (subject to their terms), all claims
incurred by the Company Employees and their beneficiaries
after the Closing Date under Welfare Plans sponsored by
Holdco, an Acquired Company or a Subsidiary of either.
Notwithstanding the foregoing, matters with respect to any
Welfare Plan that is a plan, fund or program established or
maintained for the purpose of providing unemployment,
severance or workers' compensation benefits shall be governed
by Sections 6.12 and 6.14 to the extent those sections are
inconsistent with this Section 6.6.
6.7. FLEXIBLE SPENDING ACCOUNTS. ConAgra maintains a plan qualified
under Code Section 125 ("ConAgra's 125 Plan") that includes
flexible spending accounts for medical care reimbursements and
dependent care reimbursements ("Reimbursement Accounts"). As
soon as reasonably practicable following the Closing Date,
cash equal to the aggregate value of the Reimbursement
Accounts of the Company Employees shall be transferred from
ConAgra to a plan established by Holdco intended to qualify
under Code Section 125 ("Holdco's 125 Plan"). Upon receipt of
such amount, Holdco and Holdco's 125 Plan shall assume all
obligations and liabilities with respect to the Reimbursement
Accounts for the Company Employees. Holdco shall recognize the
elections of the Company Employees under ConAgra's 125 Plan
for purposes of Holdco's 125 Plan for calendar year 2002.
6.8. HOLDCO PLANS. To the extent such periods of service would have
counted under similar benefit plans of ConAgra and the
Acquired Companies
36
covering Company Employees, Holdco shall cause prior periods
of service with ConAgra and the Acquired Companies to count
for purposes of eligibility and vesting under any benefit
plans provided to Company Employees after Closing. To the
extent such conditions and provisions would be waived under
similar benefit plans of ConAgra and the Acquired Companies
covering Company Employees, Holdco shall cause the Acquired
Companies to waive pre-existing condition requirements,
evidence of insurability provisions, waiting period
requirements or any similar provisions under any employee
benefit plan or compensation arrangements provided to any
Company Employees after the Closing Date. After Closing, to
the extent such amounts paid or accrued by Company Employees
would be applied under similar benefit plans of ConAgra or the
Acquired Companies, Holdco shall also cause the Acquired
Companies to apply toward any deductible requirements and
out-of-pocket maximum limits under its employee welfare
benefit plans any amounts paid (or accrued) by each Company
Employee prior to Closing under welfare benefit plans during
the then-current plan year.
6.9. DEFINED BENEFIT PENSION PLAN AND RETIREE BENEFITS OBLIGATIONS.
From and after the Effective Time, ConAgra shall continue to
be responsible for and pay all obligations under any and all
Employee Plans or other plan of ConAgra or any Affiliate that
provides post-retirement medical or life insurance benefits
(except as required by Section 4980B of the Code and Sections
601-609 of ERISA), or that is subject to Title IV of ERISA
(except for Multiemployer Plans to the extent they cover
Company Employees), specifically including, but not limited
to, (i) the SIPCO Post-Retirement Medical Plan, and (ii) the
Swift Independent Packing Pension Plan for Nonsalaried
Employees.
6.10. STOCK OPTIONS. From and after the Effective Time, employment
of the Company Employees with an Acquired Company or Affiliate
shall be deemed to be employment with ConAgra for eligibility
to exercise and vesting purposes under any stock option,
restricted stock, phantom stock, stock appreciation right or
similar benefit granted to a Company Employee by ConAgra or an
Affiliate prior to the Effective Time under any ConAgra stock
option plan and under the ConAgra Foods, Inc. Long Term Senior
Management Incentive Plan; provided, however, these provisions
shall not apply with respect to any periods of employment
during which the entity employing the Company Employee is less
than twenty-five percent (25%) owned, directly or indirectly,
by ConAgra and its Affiliates. ConAgra shall be responsible
for all costs and expenses associated, including, without
limitation, benefits payable, with the requirements of this
Section 6.10.
6.11. DEFERRED COMPENSATION. As of the Closing Date, Company
Employees shall cease to actively participate in any plan or
program described in Section 3(2) of ERISA that is not
intended to be qualified under Section
37
401(a) of the Code and that is sponsored by ConAgra or any
Affiliate that is not an Acquired Company ("Nonqualified
Plan"). ConAgra shall be responsible for and shall pay (or
cause to be paid) all benefits due under any Nonqualified
Plan. From and after the Effective Time, employment of the
Company Employees with an Acquired Company or an Affiliate
shall be deemed to be employment with ConAgra for purposes of
vesting and eligibility for earnings or interest under any
Nonqualified Plan; provided, however, that this provision
shall not apply with respect to any periods of employment
during which the entity employing the Company Employees is
less than twenty-five percent (25%) owned, directly or
indirectly, by ConAgra and its Affiliates. ConAgra shall be
responsible for all costs and expenses associated with the
requirements of this Section 6.11. Holdco shall be responsible
for and shall pay (or cause to be paid) all benefits under
nonqualified plans sponsored by any Acquired Company that are
listed on Exhibit 6.11.
6.12. WORKER'S COMPENSATION. ConAgra shall be responsible for and
shall pay, or shall cause its workers' compensation plans,
policies (or similar arrangements for compensating employees
for on-the-job injuries or illnesses) or carriers to be
responsible for and pay (subject to the terms of the
applicable plan, policy or arrangement), all claims asserted
by the Company Employees whose place of employment is in the
United States (whether such claim is asserted before, on or
after the Closing Date) arising or resulting from, or relating
to, incidents occurring on or before the Closing Date (whether
or not the incident has been reported on or before the Closing
Date). Holdco shall be responsible for and pay or cause to be
paid, or shall cause its workers' compensation plans, policies
(or similar arrangements for compensating employees for
on-the-job injuries or illnesses) or carriers to be
responsible for and pay (subject to the terms of the
applicable plan, policy or arrangement), all claims asserted
by the Company Employees arising or resulting from, or
relating to, incidents occurring after the Closing Date.
6.13. STAY BONUSES. Holdco shall be responsible for and shall pay
any and all retention, change in control, stay-pay or similar
obligations which result from this Agreement or the
consummation of the transactions contemplated herein as
described and in the amounts set forth on Part I of Exhibit
6.13. ConAgra shall be responsible for and shall pay to the
Company Employees any and all retention, change in control,
stay-pay or similar obligations which result from this
Agreement or the consummation of the transactions contemplated
herein as described and in the amount set forth on Part II of
Exhibit 6.13. ConAgra represents and warrants that, except as
disclosed in Parts I and II of Exhibit 6.13, no amounts will
be payable to any Company Employee as a result of the
transactions contemplated by the Transaction Documents.
38
6.14. SEVERANCE. ConAgra shall be responsible for and shall pay any
amount due to any individual who is terminated by ConAgra or
an Affiliate (that is not an Acquired Company) in accordance
with Section 6.1 that results from the termination of
employment of such individual from ConAgra or an Affiliate
that is not an Acquired Company or Acquiring Company. ConAgra
shall be responsible for and shall pay any amount due to the
individual listed on Exhibit 6.14(a) that results from the
termination of employment of such individual from ConAgra or
an Affiliate or an Acquired Company or Acquiring Company,
whether or not in connection with the transactions
contemplated by the Transaction Documents. Holdco shall be
responsible for and shall pay any amount due to any Company
Employees (other than the individual listed on Exhibit
6.14(a)) whose employment with an Acquiring Company or
Acquired Company is terminated following the Closing. Holdco
shall offer to the individuals listed on Exhibit 6.14(b)
severance benefits set forth on Exhibit 6.14(b). In addition,
Holdco shall use its reasonable efforts to ensure that any
individual listed on Exhibit 6.14(b) that accepts employment
with an Acquired Company waives severance rights under any
agreement or arrangement with ConAgra existing prior to the
Closing.
6.15. EMPLOYMENT AGREEMENTS. Subject to ConAgra's obligations set
forth in Sections 6.13 and 6.14, Holdco shall be responsible
for any payments due under the employment letters, agreements
and arrangements set forth on Exhibit 6.15.
6.16. [Intentionally Omitted]
6.17. COOPERATION. The parties shall cooperate with each other and
exchange any information, filings or notices (including the
notice required by Section 204(h) of ERISA) as appropriate to
implement the provisions of this Article 6.
6.18. INDEMNITY. After the Closing, Holdco shall indemnify and hold
each of the ConAgra Indemnified Parties harmless from and
against any ConAgra Indemnified Costs resulting directly or
indirectly from any breach or nonfulfillment of any agreement,
representation, warranty or covenant on the part of Holdco,
the other Acquiring Companies or the Acquired Companies under
this Article 6. After the Closing, ConAgra shall indemnify and
hold each of the Holdco Indemnified Parties harmless from and
against any Holdco Indemnified Costs resulting directly or
indirectly from any breach or nonfulfillment of any agreement,
representation, warranty or covenant on the part of ConAgra
under this Article 6. With respect to any third-party action
(as defined in Section 12.4.1) relating to the indemnification
obligations set forth in this Section 6.18, Section 12.4 shall
govern the procedures, rights and obligations with respect
thereto.
39
6.19. LLC EMPLOYEES. Notwithstanding the foregoing provisions of
Article 6, Company Employees who are employed by Better Beef
LLC or Colorado Feed LLC ("LLC Employees") and employee
benefit plans covering the LLC Employees and the claims and
liabilities associated with the LLC Employees under such
employee benefit plans shall be handled as follows:
(a) ConAgra and Holdco intend that the consummation of
the transactions contemplated by this Agreement
shall not cause a change in the employment status
of the LLC Employees.
(b) To the extent that the LLC Employees are covered by
employee benefit plans that are sponsored by
ConAgra or any Affiliate of ConAgra that is not an
Acquired Company, the LLC Employees shall cease to
participate in such plans as of the Closing Date
(except as provided in the Transition Services
Agreement), and ConAgra shall be responsible for
and shall pay, or shall cause to be paid or shall
cause its employee benefit plans to be responsible
for and pay (subject to their terms), all claims
and Liabilities associated with the LLC Employees
arising on or before the Closing Date, and neither
ConAgra nor any Affiliate that is not an Acquired
Company shall have any Liability for any claims and
Liabilities associated with the LLC Employees that
arise after the Closing Date.
(c) To the extent that the LLC Employees are covered by
employee benefit plans that are not sponsored by
ConAgra or any Affiliate of ConAgra that is not an
Acquired Company, ConAgra shall be responsible for
and shall pay, or shall cause to be paid, its share
of all claims and Liabilities associated with the
LLC Employees under such employee benefit plans
arising on or before the Closing Date in accordance
with past practices in effect for such claims and
Liabilities, and neither ConAgra nor any Affiliate
that is not an Acquired Company shall have any
Liability for any claims and Liabilities associated
with the LLC Employees that arise after the Closing
Date.
7. REPRESENTATIONS AND WARRANTIES OF CONAGRA. ConAgra hereby represents
and warrants to Acquisition LP as set forth below. Such representations and
warranties are made subject to those matters set forth in the ConAgra Disclosure
Schedule dated as of the date hereof and delivered as a separate document (the
"ConAgra Disclosure Schedule") in the manner provided for in the introductory
paragraph of the ConAgra Disclosure Schedule. After the date of their respective
formation, each of the following representations and warranties pertaining to an
Acquiring Company shall also cover S&C Holdco 2, S&C Holdco 3, Cattleco Holdco,
U.S. Acquisition Co., Brand Holdco and Australia Acquisition Co., as applicable,
as of their respective date of formation through the time period that
Acquisition LP acquires its Acquisition LP Percentage Interest. Except to the
extent that the provisions of a particular representation and
40
warranty expressly provide that it is made as of a specified date, each of the
following representations and warranties shall be made as of the date of this
Agreement and shall constitute continuing representations and warranties made as
of each date after the date of this Agreement prior to and including the Closing
Date. Each of the representations and warranties set forth in Sections 7.1, 7.6,
7.8, 7.9, 7.10, 7.11, 7.12, 7.13, 7.14, 7.15, 7.16, 7.17, 7.18, 7.19, 7.20,
7.21, 7.22, 7.23, 7.24 and 7.25, insofar as they pertain to Better Beef LLC and
Colorado Feed LLC shall be deemed to have been made to the Knowledge of ConAgra.
For purposes of Article 12, following the Closing, all such representations and
warranties shall be deemed to have been made directly to Holdco and each
Subsidiary thereof.
7.1. ORGANIZATION, GOOD STANDING AND CORPORATE POWER. Each
Acquiring Company and Acquired Company is duly organized,
validly existing and in good standing under the laws of its
jurisdiction of formation as set forth on Schedule 7.1. Each
Acquiring Company and Acquired Company has power and authority
to own, operate and lease its properties and to carry on its
business as now being conducted. Each Acquiring Company and
Acquired Company is duly qualified and in good standing to
conduct its business in all jurisdictions listed on Schedule
7.1, which jurisdictions represent every jurisdiction in which
the nature of its business or the ownership or leasing of its
properties makes such qualification necessary except where the
failure to so qualify has not had a Company Material Adverse
Effect.
7.2. ARTICLES AND BY-LAWS. ConAgra has previously made available to
Acquisition LP complete and correct copies of the certificates
or articles of incorporation, applications, constitutions,
certificates of formation, by-laws and operating agreements
(or equivalent organization and governing documents) of Holdco
and each Acquired Company, as in effect at the date of this
Agreement (collectively, and together with the certificates of
incorporation, applications, constitutions and by-laws of each
of the Acquiring Companies to be formed prior to the Closing
as provided herein, the "Charter Documents"). As of the
Closing, the Charter Documents shall be in the form and
substance as previously delivered to Acquisition LP or, as
applicable, in the form and substance attached as an Exhibit
to this Agreement. Schedule 7.2 contains a complete and
accurate list of all officers and directors (or equivalent
Persons) of Holdco and each Acquired Company. No Acquired
Company (other than Better Beef LLC and Colorado Feed LLC)
and, to the Knowledge of ConAgra, neither Better Beef LLC nor
Colorado Feed LLC is in violation of any provisions of its
Charter Documents.
7.3. CORPORATE AUTHORIZATION; BINDING EFFECT. ConAgra and each
Acquiring Company and Acquired Company has all requisite power
and authority to enter into this Agreement and each other
agreement, document and instrument required to be executed in
accordance herewith, including, without limitation, each of
the documents the forms of which are attached as Exhibits
hereto (collectively with the Agreement, the "Transaction
41
Documents"), to which ConAgra or any such Acquiring Company or
Acquired Company is a party and to consummate the transactions
contemplated hereby or thereby. The execution and delivery of
the Transaction Documents by ConAgra and each Acquiring
Company and Acquired Company and the consummation by ConAgra
and such Acquiring Company and Acquired Company of
transactions contemplated hereby and thereby have been duly
authorized by all necessary action on the part of ConAgra and
such Acquiring Company and Acquired Company. This Agreement
has been, and at the Closing each of the other Transaction
Documents to which ConAgra and each Acquiring Company and
Acquired Company is a party will be, duly executed and
delivered by ConAgra and such Acquiring Company and Acquired
Company. This Agreement constitutes, and upon execution and
delivery thereof by ConAgra and each Acquiring Company and
Acquired Company, the other Transaction Documents to which
ConAgra and each Acquiring Company and Acquired Company is a
party will constitute, the valid and binding obligations of
ConAgra and each Acquiring Company and Acquired Company,
enforceable against it in accordance with its respective
terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar
laws affecting creditors' rights and remedies generally and
subject, as to enforceability, to general principles of
equity.
7.4. EFFECT OF AGREEMENT. Except as set forth on Schedule 7.4, the
execution, delivery and performance of the Transaction
Documents by ConAgra, the Acquiring Companies and the Acquired
Companies and the consummation by ConAgra, the Acquiring
Companies and the Acquired Companies of the transactions
contemplated hereby and thereby will not, with or without the
giving of notice or the lapse of time or both, assuming
compliance with the matters referred to in Section 7.5, (i)
violate, conflict with, or result in any breach of any
provision of any of the Charter Documents, or ConAgra's
certificate of incorporation or by-laws, (ii) violate,
conflict with, or result in a violation or breach of, or
constitute a default (with or without due notice or lapse of
time or both) under, or require the consent or approval of any
third-party under or permit the termination of, or result in
the acceleration of, or entitle any party to accelerate
(whether as a result of a change in control of any Acquiring
Company or Acquired Company or otherwise) any obligation, or
result in the loss of any benefit, or give any Person the
right to require any security to be repurchased, or give rise
to the creation of any Lien upon any of the properties or
assets of ConAgra or any Acquiring Company or Acquired Company
under, any of the terms, conditions, or provisions of any loan
or credit agreement, note, bond, mortgage, indenture or deed
of trust, or any Company Material Contract or, with respect to
ConAgra, any material contract, to which any of them is a
party or by which any of them or any of their properties or
assets may be bound or subject, or (iii) violate any Law
applicable to ConAgra or any
42
Acquiring Company or any Acquired Company or by which or to
which any of their respective properties or assets is bound or
subject.
7.5. GOVERNMENT AUTHORIZATION. Except as set forth on Schedule 7.5,
the execution, delivery and performance by ConAgra of the
Transaction Documents requires no consent, approval, order, or
authorization of, or registration, declaration, or filing
with, any Governmental Authority other than (a) the filing of
a pre-merger notification report under the HSR Act; (b)
applicable requirements, if any, of the Securities Act of
1933, as amended (the "Securities Act"), and state securities
or blue sky laws; and (c) compliance with any applicable
non-United States laws intended to prohibit, restrict, limit
or regulate actions having the purpose or effect of
monopolization or restraint of trade or regulating foreign
investment, including, without limitation, FATA.
7.6. CAPITAL STOCK; TITLE TO SHARES. Schedule 7.6 sets forth the
capitalization of Holdco and each Acquired Company, including
the number of authorized shares of each class of capital
stock, voting securities or other ownership interests and the
par value thereof, the number of shares of each class of
capital stock, voting securities or other ownership interests
held in treasury, and the number of issued and outstanding
shares of each class of capital stock, voting securities or
other ownership interests and the names of, and number of
securities held by, the record owners thereof, and such
ownership is free and clear of all Liens. At the Closing, each
Acquiring Company's ownership of each other Acquiring Company
as contemplated herein shall constitute ownership of all
outstanding securities of the Acquiring Company so owned and
such ownership shall be free and clear of all Liens. No shares
of capital stock, voting securities or other ownership
interests of any Acquiring Company or any Acquired Company are
reserved for issuance for any purpose. As to each Acquiring
Company and Acquired Company, there are no bonds, debentures,
notes or other indebtedness issued or outstanding having the
right to vote ("Voting Debt") on any matters on which holders
of capital stock, voting securities or other ownership
interests thereof may vote. All of the issued and outstanding
shares of capital stock, voting securities or other ownership
interests of each Acquiring Company and Acquired Company are
duly authorized, validly issued, fully paid and nonassessable
and have not been issued in violation of any preemptive or
similar rights. There are no options, warrants, calls, rights,
commitments or agreements of any character to which any
Acquiring Company or Acquired Company is a party or by which
it is bound obligating it to issue, deliver or sell, or cause
to be delivered or sold, additional shares of capital stock,
voting securities or other ownership interests or any Voting
Debt of such Acquiring Company or Acquired Company, or
obligating such Acquiring Company or Acquired Company to
grant, extend or enter into any such option, warrant, call,
right, commitment or agreement. There are no outstanding
contractual obligations of any Acquiring Company or Acquired
Company
43
to repurchase, redeem or otherwise acquire any shares of
capital stock of any Acquiring Company or Acquired Company. No
Acquired Company has any Subsidiaries other than another
Acquired Company. Schedule 7.6 sets forth a general
description of the business, assets and Liabilities of each
Divested Company. No Acquiring Company or Acquired Company has
any ownership interest, directly or indirectly, in Weld
Insurance Co., Inc. or ConAgra International (Far East)
Limited.
7.7. FINANCIAL STATEMENTS. ConAgra has heretofore delivered to
Acquisition LP copies of (i) the audited combined balance
sheets of the ConAgra Red Meat Business (as defined in
footnote 1 to such audited financial statements) as of May 27,
2001 and May 28, 2000, and the combined statements of
earnings, stockholder's net investment and advances and cash
flows for the years ended May 27, 2001, May 28, 2000, and May
30, 1999 (the "Audited Financial Statements"), and (ii) the
unaudited combined summary balance sheets, summary statements
of earnings and summary cash flows of the ConAgra Red Meat
Business for the years ended May 31, 1998, and May 25, 1997,
and the unaudited combined summary balance sheet of the
ConAgra Red Meat Business for the year ended May 30, 1999
(collectively, the "Prior Unaudited Financial Statements"),
and (iii) the unaudited balance sheet of the ConAgra Red Meat
Business (the "Most Recent Balance Sheet") as of February 24,
2002 (the "Balance Sheet Date"), together with (A) the related
combined statements of earnings, stockholder's net investment
and advances and cash flows for the nine periods ended
February 24, 2002, and (B) the related combined statement of
earnings and cash flows for the nine periods ended February
25, 2001 (together with the Most Recent Balance Sheet, the
"Most Recent Unaudited Financial Statements"). The Prior
Unaudited Financial Statements and the Most Recent Unaudited
Financial Statements shall be collectively referred to as the
"Unaudited Financial Statements." The Audited Financial
Statements and the Unaudited Financial Statements shall be
collectively referred to as, the "Financial Statements." The
Financial Statements, other than the Prior Unaudited Financial
Statements (including the related notes), have been prepared
in accordance with GAAP (other than the absence of related
notes in the case of the Unaudited Financial Statements),
present fairly, in all material respects, the financial
position, results of operations, stockholder's equity and cash
flows of the ConAgra Red Meat Business as of such dates and
for the periods then ended, except in the case of the
Unaudited Financial Statements for normal year end adjustments
that are not material in nature. The information presented by
the Prior Unaudited Financial Statements has been prepared on
a basis consistent with the accounting principles used in the
preparation of ConAgra's consolidated audited financial
statements and in a manner as required by SEC Regulation S-K
Item 301 and fairly presents, in all material respects, the
financial position, results of operations, stockholder's
equity and cash flows of the ConAgra Red Meat Business as of
such dates and for the periods then ended.
44
7.8. CONDUCT OF BUSINESS SINCE MAY 27, 2001. Since May 27, 2001 and
except for the transactions contemplated herein:
7.8.1. As of the date hereof, there has not been a Company
Material Adverse Effect.
7.8.2. Except as set forth on Schedule 7.8.2, as of the date
hereof, no event has occurred that would have been
prevented by Section 9.1.1 if the terms of such Section
had been in effect as of and after May 27, 2001.
7.8.3. Except as set forth on Schedule 7.8.3 and except for
indebtedness owed by an Acquired Company to ConAgra or a
Subsidiary thereof, since the Balance Sheet Date, none of
the Acquiring Companies or Acquired Companies have
incurred or assumed any indebtedness for borrowed funds or
purchase money indebtedness, or assumed, guaranteed,
endorsed or otherwise become liable or responsible
(whether directly, contingently or otherwise) for the
obligations of any other Person, except in respect to such
assumptions, guarantees or endorsements for such amounts
that are immaterial and incurred in the ordinary course of
the Acquired Companies.
7.9. TAXES AND TAX RETURNS.
7.9.1. GENERAL TAX REPRESENTATIONS. Except as set forth on
Schedule 7.9.1:
(i) All material Tax returns required to be filed by or
with respect to any Acquired Company have been duly
and timely filed; all material items of income,
gain, loss, deduction and credit or other items
required to be included in each such Tax return
have been so included and all such items and any
other information provided in each such Tax return
is true, correct and complete in all material
respects; all material Taxes owed by any Acquired
Company which are or have become due have been
timely paid in full; no penalty, interest or other
charge is or will become due with respect to the
late filing of any such Tax return or late payment
of any such Tax; all material Tax withholding and
material deposit requirements imposed on or with
respect to any Acquired Company have been satisfied
in full; and there are no Liens on any of the
assets of any Acquired Company that arose in
connection with any failure (or alleged failure) to
pay any material Tax, except as shown on Schedule
7.23.1(a) or Schedule 7.23.1(b);
(ii) All deficiencies asserted as a result of all
federal, state, local and foreign Tax examinations
of the Acquired Companies have been paid, fully
settled or adequately provided for as a Liability
45
in the books and records of either the Acquired
Companies or ConAgra;
(iii) There are no pending examinations or written claims
asserted for Taxes of any Acquired Company or
outstanding agreements or waivers extending the
statutory period of limitation applicable to any
Tax return of any Acquired Company for any period
or any pending Tax litigation of any Acquired
Company;
(iv) No Acquired Company has filed a consent under
Section 341(f) of the Code;
(v) Subject to the requirements of Exhibit 5.1.1
hereto, the amounts set up as liabilities for
current and deferred Taxes in the Most Recent
Balance Sheet will be sufficient to cover the
payment of all material Taxes in accordance with
GAAP, whether or not assessed or disputed, which
are, or are hereafter found to be, or to have been,
due by or with respect to the Acquired Companies up
to and through the periods ending on the dates
thereof;
(vi) No Acquired Company has made any payments, is
obligated to make any payments, or is a party to
any agreement that would obligate it to make any
payments that would not be deductible by operation
of Section 162(m) of the Code;
(vii) Since May 27, 1995, no Acquired Company (a) has
been a member of an affiliated group filing a
consolidated federal Income Tax return, other than
the group of which ConAgra is the common parent
(the "ConAgra Group"), or (b) has any Liability for
the Taxes of any Person (y) under Treas. Reg.
Section 1.1502-6 (or any similar provision of
state, local, or foreign law) other than for any
member of the ConAgra Group, or (z) as a transferee
or successor, by contract or otherwise, except for
Taxes payable under a contract entered into in the
ordinary course of business;
(viii) The ratio of Australia Operating Company's land
assets to its total assets, whether considering its
assets alone or including any assets that it is
deemed to own under the stamp duty legislation or
duty legislation in any Australian State or
Territory, is such that any acquisition, issue,
redemption or cancellation of shares in Australia
Operating Company cannot give rise to stamp duty or
duty being incurred in any Australian State or
Territory at ad valorem conveyance rates, either in
46
substitution for or in addition to any duty at
transfer of share rates; and
(ix) In relation to Australia Operating Company and any
of its Subsidiaries (each of these companies are
referred to as an "Australian Company" in this
paragraph): (a) each Australian Company has
maintained, in all material respects, reasonably
accurate records required under any Law relating to
material Taxes; (b) no Australian Company that is
an Acquired Company has claimed or has been a party
to any claim for rollover relief under the capital
gains rules; (c) no material dividend has been paid
or is payable by an Australian Company (including a
deemed dividend) which would result in the company
being liable for material franking deficits tax or
material deficits deferral tax (each term as
defined in the Income Tax Assessment Act of 1936 of
Australia (the "1936 Act")); (d) no material debt
or other obligation of an Australian Company has
been or is proposed to be forgiven within the
meaning of Schedule 2C (Division 245) of the 1936
Act; and (e) no share capital account of an
Australian Company is or has been "tainted" within
the meaning of part IIIAA of the 1936 Act.
7.9.2. TAXES SINCE MAY 27, 2001. Since May 27, 2001, no Acquired
Company has incurred any material Tax Liability other than
Taxes incurred in the ordinary and regular course of its
business.
7.9.3. DEFINITIONS. For purposes of this Agreement, (i) the term
"Tax" or "Taxes" shall mean all taxes, charges, fees,
levies or other assessments of any kind, including,
without limitation, income, gross receipts, excise,
property, sales, use, license, payroll, franchise, stamp,
ad valorem, transfer, profits, severance, withholding,
unemployment compensation, social security, fringe
benefits, duties or business occupation and other taxes
and charges of any nature whatsoever imposed by the United
States, or any state, local or foreign authority,
government or subdivision or agency thereof whether
computed on a consolidated, unitary, combined or separate
basis; and such term shall include any and all interest,
penalties and additions to tax, as well as any transferee
Liability for taxes; (ii) the term "Tax return" shall mean
any report, return, statement or other document filed or
required by Law to be filed with a taxing authority in
connection with Taxes; (iii) the term "Pre-Closing Period"
shall mean any Taxable year that ends on or before the
Closing Date, and, with respect to any Taxable year
beginning before and ending after the Closing Date, shall
mean the portion of such Taxable year ending on the
Closing Date; (iv) the term "Income Taxes" shall mean all
federal, state, local, foreign and other governmental
Taxes imposed on or measured by net income or
47
Taxes that are the functional equivalent of Taxes imposed
on or measured by net income that are imposed on or
measured by capital; and (v) the term "Non-Income Taxes"
shall mean any Taxes other than Income Taxes.
7.10. INTELLECTUAL PROPERTY.
7.10.1. Schedule 7.10.1 lists:
(i) Each item of Trademark Intellectual Property owned
by any Acquired Company, or by ConAgra or ConAgra's
Affiliates and used primarily in the Businesses,
which is registered or for which an application has
been filed in a Covered Country;
(ii) Each item of Non-Trademark Intellectual Property
owned by any Acquired Company and material to the
operation of the Businesses, or owned by ConAgra or
ConAgra's Affiliates and used primarily in the
Businesses, which is registered or for which an
application has been filed in the United States or
Australia; and
(iii) Each license or other agreement under which the
intellectual property of a third-party is licensed
to an Acquired Company, where the licensed
intellectual property is material to the operation
of the Businesses, other than normal and routine
off-the-shelf software license agreements.
True and complete copies of the foregoing, and all related
license agreements or contracts have been previously made
available to Acquisition LP.
7.10.2. Except as set forth in Schedule 7.10.2:
(i) Each Acquired Company has (or Brand Holdco will
have as a result of actions to be taken as
described in this Agreement) good title, free and
clear of all Liens, to each item of Trademark
Intellectual Property listed in Schedule 7.10.1
which exists in a Covered Country, and to other
items of material Trademark Intellectual Property
and Non-Trademark Intellectual Property relating to
or used or intended for use primarily in connection
with the Processing Business or the Feed Lot
Business (other than (x) those items of
intellectual property that are owned by a third
party and licensed to an Acquired Company and (y)
those items of intellectual property that are
retained by ConAgra and that are used by ConAgra to
provide the services contemplated by the Transition
Services Agreement and the Risk Management
Agreement) and, to the Knowledge of ConAgra, each
Acquired Company has the legal
48
right to use the intellectual property associated
with the licenses or other agreements listed in
Schedule 7.10.1. To the Knowledge of ConAgra, each
Acquired Company has the legal right to use the
know-how and trade secrets currently being used in
the operation of the Businesses;
(ii) For each material United States and Australian
patent, patent application, design patent,
industrial design, and design patent application
listed in Schedule 7.10.1, all maintenance fees
required to be paid to avoid abandonment have been
timely paid;
(iii) For each item of Trademark Intellectual Property
existing in a Covered Country listed in Schedule
7.10.1, all appropriate affidavits and associated
fees necessary to show continued use, and all
renewals and associated fees, have been timely
filed with the appropriate administrative or
governmental office;
(iv) As listed in Schedule 7.10.1 (x) each material
United States and Australian patent application and
copyright application remains pending and has not
been abandoned, (y) each material United States and
Australian patent is validly existing and in full
force and effect, and (z) each item of Trademark
Intellectual Property in a Covered Country listed
in Schedule 7.10.1 is validly existing and in full
force and effect.
(v) Each license agreement or contract listed in
Schedule 7.10.1, under which an Acquired Company
has any license, right or interest in the material
Intellectual Property Rights is a valid and binding
agreement which remains in full force and effect;
(vi) To the Knowledge of ConAgra, no product used, sold
or manufactured by an Acquired Company, nor the
conduct of the Businesses as currently conducted,
infringes on or otherwise violates the patent,
design patent, trademark, service xxxx, trade name,
copyright, industrial design, trade secret or other
intellectual property right of any third-party;
(vii) There are no unresolved Actions pending or, to the
Knowledge of ConAgra, threatened, that allege an
Acquired Company has infringed or misappropriated
the intellectual property of any third-party or
that question the validity or ownership of the
Trademark or Non-Trademark Intellectual Property
owned by the Acquired Companies or used in the
Businesses. To the Knowledge of ConAgra, no
third-party has misappropriated or infringed any
material Trademark or Non-Trademark
49
Intellectual Property owned by the Acquired
Companies or used in the Businesses.
(viii) No Acquired Company is a party to any agreements,
or named in or a party to any judicial orders or
settlement agreements which limits or restricts
such Acquired Company's use or right to use any of
the material Trademark Intellectual Property, or
Non-Trademark Intellectual Property or to any item
of Trademark Intellectual Property listed in
Schedule 7.10.1 which exists in a Covered Country.
The Acquired Companies have not granted any
licenses or other rights to any Trademark
Intellectual Property listed in Schedule 7.10.1
which exists in a Covered Country, or to any other
item of the material Trademark Intellectual
Property or Non-Trademark Intellectual Property
owned by the Acquired Companies or used in the
Businesses, and are under no obligation, contingent
or otherwise, to do so now or in the future.
7.10.3. "Trademark Intellectual Property" shall mean intellectual
property of any kind relating to trademarks and the
goodwill attached thereto, including, without limitation,
all trademarks, trademark registrations, trademark
applications, service marks, service xxxx registrations,
service xxxx applications, trade names, registered trade
names, trade name applications, domain names, brands and
product configurations, all trademarks containing the term
"Swift" and any derivatives, and any other item or thing
that tends to indicate the source of a particular product
or service.
7.10.4. "Non-Trademark Intellectual Property" shall mean all
intellectual property of any kind, including, without
limitation, all inventions (whether patented or not),
discoveries, technical advances, patents, copyrights,
computer software, documentation, confidential and
proprietary information (including trade secrets and
know-how), and registrations and applications for
registration of the foregoing, excluding, however, the
Trademark Intellectual Property.
7.11. ABSENCE OF UNDISCLOSED LIABILITIES. As of the date hereof,
there are no Liabilities or obligations of any kind material
to the Business (whether absolute, accrued, fixed, known or
unknown, contingent or otherwise) of an Acquired Company that
are not reflected on or reserved against in the Most Recent
Balance Sheet, other than (i) Liabilities or obligations
incurred in the ordinary course of business since the Balance
Sheet Date, or as otherwise contemplated by this Agreement,
(ii) Liabilities and obligations arising pursuant to this
Agreement, (iii) any such Liability or obligation which would
not be required to be presented in financial statements
prepared in conformity with GAAP, and (iv) the items set forth
on Schedule 7.11.
50
7.12. ACTIONS AND PROCEEDINGS. Except as set forth on Schedule 7.12,
as of the date hereof, and other than collection matters,
automobile liability claims, workers' compensation claims
(with respect to claims relating to Australia, this term shall
refer to claims brought under the Workplace Injury Management
and Workers Compensation Act of 1998 (NSW), Workcover
Queensland Act of 1996 (QLD) or equivalent state legislation)
and other matters that individually and collectively are not
material and that arise in the ordinary course of business,
there is no Action pending (including current actions) or, to
the Knowledge of ConAgra, threatened against any Acquired
Company or any of its properties, assets or Businesses, nor to
the Knowledge of ConAgra are there any investigations or
prosecutions of any Acquired Company or any of its directors,
officers, key employees, properties, assets or Businesses
pending (including current investigations or prosecutions) or
threatened by or before any arbitrator or Governmental
Authority. Except as set forth on Schedule 7.12, as of the
date hereof, and other than collection matters, automobile
liability claims, workers' compensation claims and other
matters that individually and collectively are not material
and that arise in the ordinary course of business, there is no
judgment, decree, injunction, order, determination, award,
finding or letter of deficiency of any Governmental Authority
or arbitrator outstanding against any Acquired Company or any
of its properties, assets or Businesses. Except as set forth
on Schedule 7.12, as of the date hereof, there is no Action
pending (including current actions) or, to the Knowledge of
ConAgra, threatened against any Acquired Company relating to
the transactions contemplated by this Agreement and the other
Transaction Documents. Except as set forth on Schedule 7.12,
as of the date hereof, there are no material unfunded
settlements or other settlements or letters of commitment or
conciliation agreements that any Acquired Company has entered
into with any party, including any Governmental Authority.
7.13. COMPLIANCE WITH LAWS.
7.13.1. Except as set forth on Schedule 7.13.1, the Businesses
have been conducted in compliance with all Laws in all
material respects (other than non-compliance with Laws
that has been corrected prior to the date hereof and for
which the Acquired Companies have no further Liability
under any Laws).
7.13.2. Schedule 7.13.2 lists all material licenses, permits,
permissions or authorizations issued to any Acquired
Companies by any Governmental Authority and currently held
by it. Such licenses, permits, permissions and
authorizations, and all applications for modification,
extension or renewal thereof or for new licenses, permits,
permissions or authorizations are collectively referred to
herein as the "Licenses." Schedule 7.13.2 lists the
legally authorized holder(s) of the Licenses, each of
which is in full force and effect.
51
Each Acquired Company has duly obtained all material
licenses, permits, permissions and authorizations
necessary for the conduct of the Businesses in the
ordinary course, consistent with past practice. To the
Knowledge of ConAgra, except as set forth on Schedule
7.13.2, the Businesses have been operated in all material
respects in accordance with the terms of the Licenses. As
of the date hereof, there are no proceedings pending or,
to the Knowledge of ConAgra, threatened with respect to
any Acquired Company, that reasonably may be expected to
result in the revocation, material adverse modification,
non-renewal or suspension of any of the Licenses, the
denial of any pending applications for Licenses, the
issuance against any Acquired Company of any cease and
desist order, or the imposition of any administrative
actions by any Governmental Authority with respect to the
Licenses. Except as set forth on Schedule 7.13.2, the
consummation of the transactions contemplated by this
Agreement will not result in the termination of any
License or require any Acquiring Company or Acquired
Company to replace or amend any License.
7.13.3. The provisions of this Section 7.13 shall not apply to the
subject matter of Sections 7.16, 7.17 and 7.18.
7.14. MATERIAL CONTRACTS. Schedule 7.14 lists each of the Company
Material Contracts required to be transferred pursuant to
Section 9.2.2. Schedule 7.14 lists, with regard to the
Acquired Companies or Company Employees, each oral or written
(a) agreement, contract, indenture, or other instrument
relating to the borrowing of money or the guarantee of any
obligation for the borrowing of money, (b) employment
agreement with an individual requiring payments of
compensation in excess of $100,000 per year, (c) material
distributor, purchase or supply agreement which is not
terminable after the Closing by an Acquired Company without
Liability on thirty (30) days (or less) notice, (d) joint
venture or similar contract or agreement, (e) contract or
agreement that limits or purports to limit the ability of any
Acquired Company to compete in any line of business or in any
geographic area, (f) any material contract or agreement
between or among any Acquired Company on the one hand and
ConAgra or its other Subsidiaries on the other hand, (g)
collective bargaining or labor agreement, or industrial
instrument, (h) lease of real property pursuant to which any
Acquired Company is required to pay or is entitled to receive
(x) consideration in excess of $50,000 in any calendar year
after December 31, 2001, or (y) consideration in excess of
$250,000 in the aggregate over the remaining term of such
lease (collectively, the "Leases"), or (i) other material
contract, agreement or arrangement, entered into other than in
the ordinary course of business. The contracts required to be
so listed pursuant to this Section 7.14 or pursuant to Section
7.17 are collectively referred to herein as the "Company
Material Contracts." Each Company Material Contract is a valid
and binding
52
obligation of the Acquired Company that is a party thereto or
otherwise bound thereby, and is in full force and effect
without further amendment. Except as set forth on Schedule
7.14, the Acquired Company that is bound by each Company
Material Contract, and, to the Knowledge of ConAgra, each
other party thereto, is not (with or without lapse of time or
the giving of notice, or both) in material breach or default
thereunder. In respect to Company Material Contracts to be
assigned pursuant to Section 9.2.2, the assignor is bound by
each such Company Material Contract and, to the Knowledge of
ConAgra, each other party thereto, is not (with or without
lapse of time or the giving of notice, or both) in material
breach or default thereunder. No Acquired Company has received
(i) any notice, written or otherwise, of default by the
Acquired Company under any Company Material Contract or (ii)
any notice, written or otherwise, that any other party to any
such Company Material Contract has terminated or cancelled, or
intends to terminate or cancel, such contract. Schedule 7.14
identifies, as to each Company Material Contract listed
thereon, whether (A) the consent or the approval of any other
party thereto is required in order for such Company Material
Contract to continue in full force and effect upon the
consummation of the transactions contemplated hereby and by
the other Transaction Documents, (B) such Company Material
Contract can be cancelled by the other party without Liability
to such other party due to the consummation of the
transactions contemplated in the Transaction Documents or (C)
a right of first refusal, right of first offer, right of
redemption or similar right or obligation would be triggered
due to the consummation of the transactions contemplated
hereby and by the other Transaction Documents. A copy of each
written Company Material Contract and a description of each
oral Company Material Contract has been made available to
Acquisition LP. No Acquired Company has any obligation for
borrowed funds other than as reflected in the Financial
Statements and except as contemplated herein. Each Acquired
Company has valid, binding, and enforceable leasehold
interests in and to the properties covered under lease that is
a Company Material Contract, free and clear of all Liens. The
Leases are not subject to any payment default or other
material default.
7.15. RELATED PARTY TRANSACTIONS.
7.15.1. Schedule 7.15.1 sets forth a description of all material
services provided by ConAgra or its Subsidiaries (other
than the Acquired Companies) to the Acquired Companies, as
well as a description of material sales or purchase
relationships between an Acquired Company on the one hand,
and ConAgra or its other Subsidiaries on the other.
7.15.2. No Acquired Company nor any directors, officers, partners,
agents or employees thereof have (i) used any company
funds for unlawful contributions, gifts, entertainment or
other unlawful expenses relating
53
to political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or
to foreign or domestic political parties or campaigns from
corporate funds or violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended, or (iii) made
any other unlawful payment.
7.15.3. Except as set forth on Schedule 7.15.3, to the Knowledge
of ConAgra, none of the directors, officers, partners,
agents or employees of any Acquired Company (i) owns,
directly or indirectly, any significant interest in, or is
a director, officer, partner, agent or employee of, any
Person that is a competitor, lessor, lessee or customer
of, or supplier of goods or services to, the Businesses,
owns directly or indirectly, in whole or in part, any real
property, leasehold interests or other property, the use
of which is necessary for the Businesses, or (ii) has sold
to, or purchased from, any Acquired Company any assets or
property for aggregate consideration in excess of Ten
Thousand United States Dollars ($10,000) since May 27,
2001.
7.16. LABOR RELATIONS.
7.16.1. Schedule 7.16.1 lists each collective bargaining agreement
or other collective labor contract or industrial
instrument to which any Acquired Company is a party. All
such collective bargaining agreements or other collective
labor contracts or industrial instruments have been duly
ratified, certified or approved. Except for those unions
which are parties to one or more of the listed collective
bargaining agreements or as otherwise listed on Schedule
7.16.1, (i) no Acquired Company has agreed to recognize
any union or other collective bargaining representative;
and (ii) as of the date hereof, no union or other
collective bargaining representative has been certified as
the exclusive bargaining representative of any of its
employees. All employees covered by such collective
bargaining agreements or other collective labor contracts
or industrial instruments are employees of an Acquired
Company as of immediately prior to the Closing.
7.16.2. Except as set forth on Schedule 7.16.2, as of the date
hereof, there are no pending (including current) (i) labor
strikes, slowdowns, lockouts, representation or
certification campaigns, work stoppages or other forms of
industrial action with respect to employees of any
Acquired Company or to ConAgra's Knowledge, threatened
against or affecting any Acquired Company, (ii) material
grievance or arbitration proceedings, decisions, letter
agreements or settlement agreements arising out of
collective bargaining agreements to which an Acquired
Company is a party or otherwise bound or (iii) material
unfair labor practices or unfair labor practice charges or
complaints before the National Labor Relations Board or
other Governmental Authority responsible for regulating
labor relations initiated against an Acquired
54
Company or, to the Knowledge of ConAgra, threatened
against any Acquired Company.
7.16.3. Except as set forth on Schedule 7.16.3, each Acquired
Company is and has been since May 27, 2001, in material
compliance with all applicable Laws respecting labor,
employment, industrial relations and employment practices,
including, without limitation, Laws (including Australian
industrial awards and agreements) regarding terms and
conditions of employment, wages and hours, equal
employment opportunity, affirmative action, employee
benefits, plant closing and mass layoff, occupational
safety and health, immigration and workers' compensation
(collectively, the "Labor Laws") (other than
non-compliance with Labor Laws that has been corrected
prior to the date hereof and for which the Acquired
Companies have no further Liability under any Labor Laws).
7.16.4. Except as set forth on Schedule 7.16.4, as of the date
hereof, to the Knowledge of ConAgra, there are, with
respect to each Acquired Company, no charges, complaints
or proceedings before the Equal Employment Opportunity
Commission, Department of Labor or any other Governmental
Authority responsible for regulating employment practices,
initiated, or, to the Knowledge of ConAgra, threatened
against any Acquired Company.
7.16.5. Except as set forth on Schedule 7.16.5, to the Knowledge
of ConAgra, all of the Acquired Companies are in material
compliance with all Laws relating to the employment of
persons who are not citizens of the country in which they
are employed, and all Laws relating to the documentation
and recordkeeping of employees' work authorization status.
7.16.6. As of the date hereof, and since May 27, 2001, there have
not been any plant closings, mass layoffs or other
terminations of employees of the Acquired Companies which
would create any obligations upon or Liabilities for the
Acquired Companies under the Worker Adjustment and
Retraining Notification Act or similar Laws.
7.17. EMPLOYEE PLANS. For purposes of this Section 7.17 and Article
6, the term "Employee Plan" includes all pension,
superannuation, retirement, disability, medical, dental or
other health insurance plans, life insurance or other death
benefit plans, profit sharing, deferred compensation, stock
option, bonus or other incentive plans, vacation benefit plans
or policies, severance or redundancy plans or other employee
benefit plans or arrangements, including, without limitation,
any "pension plan" ("Pension Plan") as defined in Section 3(2)
of ERISA, and any "welfare plan," as defined in Section 3(1)
of ERISA, and including foreign plans not subject to ERISA,
whether or not any of the foregoing is funded, (a) to which
any
55
Acquired Company is a party or by which it is bound; (b) with
respect to which any Acquired Company has made any payments or
contributions; (c) to which any Acquired Company may otherwise
have any Liability; or (d) under which any Company Employee is
eligible to participate or benefit. Notwithstanding the
foregoing, an Australia Superannuation fund that is not nor
has ever been administered by an Australia Acquired Company
shall be considered an "Employee Plan" solely for purposes of
Sections 7.17.11, 7.17.12, 7.17.20 and 7.17.21. True, correct
and complete copies of each Employee Plan, along with related
trusts, insurance and group annuity contracts, have been made
available to Acquisition LP. The most recent Form 5500 for
each Employee Plan for which such report is required to be
filed, and summary plan descriptions have also been made
available to Acquisition LP. As to each Pension Plan subject
to Title IV of ERISA, the most recent actuarial report and
valuation has been provided to Acquisition LP. "Employee Plan"
shall not include any government-sponsored employee benefit
arrangements. Each Employee Plan is set forth on Schedule
7.17(a); if an Employee Plan is oral or has been orally
modified or amended, a summary of the material features of
such Employee Plan or amendment or modification is included on
Schedule 7.17(a). Except as set forth on Schedule 7.17(b):
7.17.1. No Acquired Company or Acquiring Company is a party to or
otherwise bound by or subject to any Liability under any
oral or written agreement, plan or arrangement with any
officer, director or management employee of an Acquired
Company (i) the benefits of which are contingent, or the
terms of which are materially altered, upon, or result
from, the occurrence of a transaction involving an
Acquired Company of the nature of any of the transactions
contemplated by the Transaction Documents, (ii) providing
Stay Bonuses, (iii) providing severance benefits or other
benefits after the termination of employment or other
contractual relationship regardless of the reason for such
termination and regardless of whether such termination is
before or after a change of control, (iv) under which any
person may receive payments not deductible under Section
280G of the Code or subject to the tax imposed by Section
4999 of the Code, or (v) any of the benefits of which may
be increased, or the vesting of benefits of which may be
accelerated, by the occurrence of any of the transactions
contemplated by the Transaction Documents or the value of
any of the benefits of which may be calculated on the
basis of any of the transactions contemplated by the
Transaction Documents, except as required by Sections 6.4
and 6.5 of this Agreement.
7.17.2. The Acquired Companies, each Employee Plan, and the
administrator and fiduciaries of each Employee Plan have
complied in all material respects with all applicable
legal requirements governing each Employee Plan. No
lawsuits, actions, claims (other than routine claims for
benefits) or complaints to, or by, any Person, are pending
56
(including current lawsuits, actions, claims or
complaints) or, to ConAgra's Knowledge, threatened with
respect to any Employee Plan.
7.17.3. No Acquired Company, Employee Plan, or administrator or
fiduciary of any Employee Plan has taken any action, or
failed to take any action, that could subject it, him, her
or any other Person to any Liability for any excise tax or
for any breach of fiduciary duty with respect to or in
connection with any Employee Plan.
7.17.4. No Acquired Company, Employee Plan, administrator or
fiduciary of any Employee Plan, or any other Person has
any Liability to any plan participant, beneficiary or
other Person under any provision of ERISA or any other
applicable Law by reason of any payment of benefits or
other amounts or failure to pay benefits or any other
amounts, or by reason of any credit or failure to give
credit for any benefits or rights (such as, but not
limited to, vesting rights) with respect to benefits under
or in connection with any Employee Plan. No Acquired
Company is in arrears with respect to any contributions
under any Employee Plan.
7.17.5. With respect to any employee benefit plan, within the
meaning of Section 3(3) of ERISA, which is sponsored,
maintained or contributed to, or which has been sponsored,
maintained or contributed to within six years prior to the
Closing, by the Acquired Companies or any Person under
common control with the Acquired Companies within the
meaning of Sections 414(b), (c) or (m) of the Code or
section 4001 of ERISA ("Commonly Controlled Entity"), (a)
no withdrawal Liability, within the meaning of Section
4201 of ERISA, has been incurred by a Commonly Controlled
Entity, which withdrawal Liability has not been satisfied;
(b) no Liability to the Pension Benefit Guaranty
Corporation has been incurred by any Commonly Controlled
Entity, which Liability has not been satisfied; (c) no
accumulated funding deficiency, whether or not waived,
within the meaning of Section 302 of ERISA or Section 412
of the Code has been incurred; and (d) all contributions
(including installments) to such plan required by Section
302 of ERISA and Section 412 of the Code have been timely
made.
7.17.6. No Employee Plan is intended to provide, at any time,
retiree medical or retiree life insurance benefits to any
Company Employee who has not retired as of the date of
this Agreement.
7.17.7. There is no matter pending (including current matters)
(other than routine qualification determination filings)
with respect to any Employee Plan before the Internal
Revenue Service, the Department of Labor or the Pension
Benefit Guaranty Corporation.
57
7.17.8. Except with respect to the acceleration of vesting as
required by this Agreement, the execution and delivery of
this Agreement and the consummation of the transactions
contemplated hereby will not create or give rise to any
additional vested rights or service credit under, require
any greater contribution to, or require payment of any
greater benefit from, any Employee Plan.
7.17.9. No Acquired Company is a participating employer in a
Multiemployer Plan.
7.17.10. No events have occurred which could result in withdrawal
Liability under any Multiemployer Plan to which
contributions are or have been made on behalf of Company
Employees, or to which contributions have been made on
behalf of employees (current or former) of Acquired
Companies, which withdrawal Liability has not been
satisfied. No withdrawal Liability would be owed by
ConAgra, its Affiliates or any Acquired Company to any
Multiemployer Plan to which contributions are made on
behalf of Company Employees if contributions on behalf of
Company Employees ceased immediately before the
consummation of the transactions contemplated by this
Agreement.
7.17.11. All accrued obligations of each Acquired Company for
payments by it to trust or other funds or to any
governmental or administrative agency, with respect to
pension benefits, unemployment compensation benefits,
social security benefits, superannuation funds, sick
leave, long service leave or any other benefits for
employees of such Acquired Company have been paid or
adequate accruals therefor have been made in the Financial
Statements, and none of the foregoing has been rendered
not due by reason of any extension, whether at the request
of an Acquired Company or otherwise.
7.17.12. All obligations of each Acquired Company with respect to
Company Employees (whether or not such Company Employees
are employed by an Acquired Company prior to Closing) for
salaries, superannuation, vacation and holiday pay, sick
leave, long service leave, bonuses and other forms of
compensation which are or were payable to its officers,
directors or other employees have been paid or adequate
accruals therefor have been made in the Financial
Statements.
7.17.13. Each Acquired Company is in material compliance with the
requirements of Sections 162(k) (to the extent applicable
prior to its amendment by the Technical and Miscellaneous
Revenue Act of 1988) and 4980B of the Code and Section 601
of ERISA.
58
7.17.14. Except as required by the collective bargaining agreements
set forth on the Disclosure Schedule, each Employee Plan
sponsored by an Acquired Company, or from which the
Acquired Company might reasonably be expected to take a
spinoff of assets and Liabilities, may be unilaterally
amended and terminated in its entirety without Liability
except as to benefits accrued thereunder prior to such
amendment or termination.
7.17.15. No Employee Plan provides that payments made pursuant to
such Employee Plan may or shall be made in securities of
any Acquired Company or any Commonly Controlled Entity,
and no trust maintained pursuant to any Employee Plan
holds any such securities.
7.17.16. Each Employee Plan that is a Pension Plan is qualified
under Section 401(a) of the Code, and the trust or trusts
maintained in connection with such Employee Plan is or are
exempt from tax under Section 501(a) of the Code. A
favorable IRS determination letter as to the qualification
under the Code has been received for each such plan and
made available to Acquisition LP.
7.17.17. No Liability under Subtitle C or D of Title IV of ERISA
has been or is expected to be incurred with respect to any
Employee Plan which is a Pension Plan but which is not a
Multiemployer Plan. Other than the Swift Independent
Packing Pension Plan for Nonsalaried Employees, on a
termination basis, there is no underfunding with respect
to any such Employee Plan.
7.17.18. None of the Acquired Companies sponsors a Pension Plan.
7.17.19. None of the Acquired Companies sponsors or has any
Liability with respect to any Nonqualified Plan.
7.17.20. Other than amounts whose quantum has been disclosed in
writing to Acquisition LP, the only contributions or
payments which any Australian Acquired Company pays or is
obligated to pay to any Employee Plan in respect of any
Company Employee (for example, under any trust deed,
industrial award or agreement or under any contract of
employment) is the minimum amount required to be
contributed by the Australian Acquired Company in order
for it to avoid being liable to pay the superannuation
guarantee charge (within the meaning of the Superannuation
Guarantee (Administration) Xxx 0000 of the Commonwealth of
Australia) in respect of that Company Employee. In this
and succeeding sub-paragraphs, "Australian Acquired
Company" means an Acquired Company which is incorporated
under the Corporations Xxx 0000 (Australia) or which is
registered under that Act to carry on business in a State
or Territory in that jurisdiction.
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7.17.21. No Australian Acquired Company is now or has ever been the
trustee of any Employee Plan.
7.18. ENVIRONMENTAL. Except as set forth on Schedule 7.18 and except
as expressly disclosed in any Environmental Site Assessments:
7.18.1. The real property and facilities owned, operated, and
leased by the Acquired Companies and the operations of the
Acquired Companies thereon comply in all material respects
with, and (other than non-compliance with Environmental
Laws that has been corrected and for which the Acquired
Companies have no further Liability under Environmental
Laws) have at all times complied in all material respects
with, all Environmental Laws.
7.18.2. No judicial proceedings are pending or, to the Knowledge
of ConAgra, threatened against any Acquired Company
alleging the violation of any Environmental Laws, and
there are no administrative proceedings pending or, to the
Knowledge of ConAgra, threatened against any Acquired
Company, alleging the violation of any Environmental Laws
and no notice from any Governmental Authority or any
private or public person has been received by any Acquired
Company claiming any violation of any Environmental Laws
in connection with any real property or facility owned,
operated or leased by any Acquired Company, or requiring
any remediation, clean-up, modification, repairs, work,
construction, alterations or installations on or in
connection with any real property or facility owned,
operated or leased by any Acquired Company under any
Environmental Laws and that have not been complied with or
otherwise resolved to the satisfaction of the party giving
notice.
7.18.3. Schedule 7.18.3(a) lists all material permits,
registrations, licenses, authorizations and similar
instruments ("Environmental Permits") required to be
obtained or filed by each Acquired Company under any
Environmental Laws in connection with its operations,
including, without limitation, those activities relating
to the generation, use, storage, treatment, disposal,
release or remediation of Hazardous Materials. All
Environmental Permits have been duly obtained or filed,
and each Acquired Company is in compliance and at all
times has complied in all material respects with the terms
and conditions of all such Environmental Permits; and,
except as set forth on Schedule 7.18.3(b), the
consummation of the transactions contemplated by this
Agreement will not result in the termination of any
Environmental Permits or require any Acquiring Company or
Acquired Company to replace or amend any Environmental
Permit.
7.18.4. All Hazardous Materials used or generated by any Acquired
Company or any of its predecessors on, in, or under any of
the owned, operated
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or leased real property or facilities are and have at all
times been generated, stored, used, treated, disposed of
and released by such persons or on their behalf in such
manner as not to result in any material Environmental
Costs or Liabilities.
7.18.5. There are not now on, in or under any property or
facilities owned, leased, or operated by any Acquired
Company any Hazardous Materials that are in a condition
that materially violates any Environmental Law or that
reasonably could be expected to require material
remediation under any Environmental Laws and there are not
now, on, in or under property or facilities previously
owned, leased, or operated by any Acquired Company any
Hazardous Materials that were disposed of during the
ownership of, lease of, or operation by such Acquired
Company and that are in a condition that materially
violates any Environmental Law or that reasonably could be
expected to require material remediation under any
Environmental Law.
7.18.6. Acquisition LP has been given access to review all
reports, surveys and site assessments of which ConAgra has
Knowledge and possession or access to that relate to
environmental investigations, surveys, audits or
assessments that have been conducted and relate to any of
the Businesses or properties previously or currently owned
(including, without limitation, properties to be
transferred hereunder) by any of the Acquired Companies.
7.18.7. No Acquired Company has received any notification from any
source advising such Acquired Company that: (A) it is a
potentially responsible party under CERCLA or any other
Environmental Laws; (B) any real property or facility
currently or previously owned, operated, or leased by it
is identified or proposed for listing as a federal
National Priorities List ("NPL") (or state-equivalent)
site or a Comprehensive Environmental Response,
Compensation and Liability Information System ("CERCLIS")
list (or state-equivalent) site; and (C) any facility to
which it has every transported or otherwise arranged for
the disposal of Hazardous Substances is identified or
proposed for listing as an NPL (or state-equivalent) site
or CERCLIS (or state-equivalent) site.
7.18.8. Except as set forth on Schedule 7.18.8, to ConAgra's
Knowledge the average daily flow of process wastewater
generated at any real property or facilities currently
owned by any of the Acquired Companies (including those
that are to be transferred to the Acquired Companies
pursuant to Sections 2.1.6 or 2.1.17) does not constitute
more than ten percent (10%) of the average daily flow of
influent wastewater at any "publicly owned treatment
works" (as that term is defined in 40 C.F.R. Section
403.3(o)) to which such wastewater is delivered. Except as
set forth on Schedule 7.18.8, to the Knowledge of
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ConAgra, each publicly owned treatment works treating
wastewater generated from such real property or facilities
is in compliance in all material respects with such
publicly owned treatment work's current wastewater
discharge permit. Except as set forth on Schedule 7.18.8,
in connection with the Businesses, other than
authorizations under which wastewater generated by an
Acquired Company is discharged to a public owned treatment
works, neither ConAgra nor any Acquired Company has agreed
or been requested to, nor, to the Knowledge of ConAgra, is
any Acquired Company expected to be requested to, enter
into any enforceable commitment or guarantees regarding
the use of or financing of any publicly owned treatment
works.
7.18.9. "Environmental Laws" mean all currently existing
foreign, federal, state and local laws, statutes,
codes, ordinances, rules, regulations, orders,
decrees, determinations, common law, judgments or
binding agreements issued, promulgated or entered
into by or with any Governmental Authority,
relating to pollution, the environment (including
ambient air, surface water, groundwater, land
surface or subsurface strata), natural resources
and public or employee health and safety or
protection of human health as it relates to the
environment, including laws and regulations
relating to Releases or threatened Releases of
Hazardous Materials, or otherwise relating to the
generation, manufacture, processing, distribution,
use, treatment, storage, transport, handling of or
exposure to Hazardous Materials, the Comprehensive
Environmental Response, Compensation and Liability
Act of 1980, as amended ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986, as
amended, the Resource Conservation and Recovery Act
of 1976, as amended, the Clean Air Act, as amended,
the Federal Water Pollution Control Act, as
amended, The Oil Pollution Act of 1990, as amended,
the Safe Drinking Water Act, as amended, the
Hazardous Material Transportation Act, as amended,
the Toxic Substances Control Act, as amended, the
Federal Insecticide Fungicide and Rodenticide Act,
the New South Wales Contaminated Land Management
Act of 1997, the New South Wales Protection of the
Environment Operations Act of 1997, the New South
Wales Environmental Planning and Assessment Act of
1979, the New South Wales State Environmental
Planning Policy 30-Intensive Agriculture, the
Queensland Environmental Protection Act of 1994 and
other environmental conservation or protection
Laws.
(i) "Hazardous Materials" means (A) any hazardous
materials, hazardous wastes, hazardous substances,
toxic wastes, and toxic substances as those or
similar terms are defined under any
62
Environmental Laws; (B) any asbestos or any
material which contains any hydrated mineral
silicate, including chrysolite, amosite,
crocidolite, tremolite, anthophylite and/or
actinolite, whether friable or non-friable; (C)
PCBs, or PCB-containing materials or fluids; (D)
radon; (E) any other hazardous, radioactive, toxic
or noxious substance, material, pollutant,
contaminant, constituent, or solid, liquid or
gaseous waste; (F) any petroleum, petroleum
hydrocarbons, petroleum products, crude oil and any
fractions or derivatives thereof, any oil or gas
exploration or production waste, and any natural
gas, synthetic gas and any mixtures thereof; (G)
any substance that, whether by its nature or its
use, is subject to regulation under any
Environmental Laws or with respect to which any
Environmental Laws or Governmental Authority
requires environmental investigation, monitoring or
remediation; (H) any underground storage tanks,
dikes, or impoundments as defined under any
Environmental Laws; and (I) brine.
(ii) "Release" means any release, spill, emission,
leaking, dumping, injection, pouring, deposit,
disposal, discharge, dispersal, leaching or
migration into the environment (including ambient
air, surface water, groundwater, land surface or
subsurface strata) or within any building,
structure, facility or fixture.
(iii) "Environmental Costs or Liability" means any
losses, liabilities, obligations, damages, fines,
penalties, judgments, settlements, actions, claims,
costs, expenses and capital expenditures
(including, without limitation, reasonable fees,
disbursements and expenses of legal counsel,
experts, engineers and consultants, and the costs
of investigation or feasibility studies and
performance of remedial or removal actions and
cleanup activities) required under any
Environmental Laws, under any order existing prior
to the Closing, or under any contract (which shall
include the Dinmore Environment Management
Programs) existing prior to the Closing of the
Company or its Subsidiaries with any Governmental
Authority or any private or public person relating
to environmental matters.
7.19. BROKERS AND FINDERS. Except for Gleacher & Co., neither
ConAgra nor any Acquiring Company or Acquired Company has
employed any investment banker, broker or finder or incurred
or reasonably expects to incur any Liability for any brokerage
fees, commissions or finders fees in connection with the
transactions contemplated by the Transaction Documents.
63
7.20. INSURANCE. The Acquired Companies have insurance policies in
full force and effect for such amounts as are sufficient for
material compliance with all requirements of Law and of all
Company Material Contracts. Set forth on Schedule 7.20 is a
list of all fire, liability and other forms of insurance and
all fidelity bonds held by or applicable to the Acquired
Companies, or the Businesses, setting forth, in respect of
each such policy, the policy name, policy number, carrier,
term, type of coverage and annual premium. Excluding insurance
policies that have expired and been replaced in the ordinary
course of business, no insurance policy has been canceled
within the last two years and, to ConAgra's Knowledge, no
threat has been made to cancel any insurance policy of any
Acquired Company during such period. Except as set forth on
Schedule 7.20, all such insurance will remain in full force
and effect with respect to periods before the Closing.
7.21. SUFFICIENCY.
7.21.1. Except as set forth on Schedule 7.21.1 and except for the
services to be received pursuant to the Transition
Services Agreement, Risk Management Agreement, Cash
Management Agreement or By-Products Agreement, and except
for the assets, systems and personnel utilized by ConAgra
or its Affiliates to provide the services pursuant to the
Transition Services Agreement, Risk Management Agreement,
Cash Management Agreement or By-Products Agreement, upon
consummation of the transactions contemplated in the
Transaction Documents, Holdco shall have (after giving
effect to the Armour Transition License Agreement and the
Swift Transition License Agreement) all the material
personnel, assets, properties and services necessary and
presently utilized to conduct the Businesses as presently
conducted. Each Acquired Company will have at the Closing
good title to all of its assets set forth on the Final
Processing Closing Balance Sheet and the Final Cattleco
Closing Balance Sheet (other than the assets in Sections
7.10 and 7.23 which shall be subject to the
representations and warranties set forth in those
Sections) free and clear of all Liens (other than
permitted Liens described on Schedule 7.23.1(a) and
Schedule 7.23.1(b)).
7.21.2. [Intentionally Omitted]
7.22. NO ACTIVITIES. Since the date of its incorporation, no
Acquiring Company has incurred any Liabilities or otherwise
engaged in any activity or business other than as contemplated
by this Agreement.
7.23. REAL PROPERTY.
7.23.1. Schedule 7.23.1(a) sets forth a list and description of
all material real property located in the United States
owned in fee by each Acquired Company or, as so designated
in such Schedule, will be owned by an
64
Acquired Company on the Closing Date. Schedule 7.23.1(b)
sets forth a list and description of all material real
property located outside the United States owned in fee by
each Acquired Company or, as so designated in such
Schedule, will be owned by an Acquired Company on the
Closing Date. Each Acquired Company has, or, with respect
to real property to be transferred to an Acquired Company
under Sections 2.1.6 and 2.1.17 prior to the Closing Date,
will have as of the Closing Date, good and marketable fee
title to each such parcel of real property described on
Schedule 7.23.1(a) or Schedule 7.23.1(b) free and clear of
all Liens, except those Liens listed on Schedule 7.23.1(a)
or Schedule 7.23.1(b) with respect to such parcel.
Schedule 7.14 sets forth a list and description of all
real property leased by or, with respect to leased real
property to be transferred to an Acquired Company under
Section 2.1.6 or 2.1.17 prior to the Closing Date, will be
leased by any Acquired Company pursuant to a Company
Material Contract.
7.23.2. To ConAgra's Knowledge, there are no material
encroachments on to any of the parcels of real property
described on Schedule 7.23.1(b), other than those
encroachments that would not materially affect the value,
use or enjoyment of such parcels, and no improvement,
structure or service on those parcels of real property
encroaches on to any adjoining land in a material manner.
No land has the benefit of any material unregistered right
or interest in or over or which burdens any part of the
parcels of real property described on Schedule 7.23.1(b).
The existing use of the parcels of real property described
on Schedule 7.23.1(b) is in all material respects the
lawful use permitted under any applicable planning
legislation or other similar zoning control vested in a
competent authority and is not temporary or personal. All
material consents necessary for those existing uses have
been obtained and are subsisting. Each of the buildings
and other improvements on each of the parcels of real
property described on Schedule 7.23.1(b) is approved and
otherwise complies in all material respects with
applicable Laws. As used in this Section 7.23.2, the term
"material" shall mean a condition which, if uncured (or,
when used in the context of a benefit, if absent),
presents a commercially unreasonable risk of materially
adversely affecting the current value of the affected
property or materially hindering or interrupting
operations at such property as currently conducted.
7.24. PRODUCT RECALLS AND WITHDRAWALS. As of the date hereof, except
as set forth on Schedule 7.24, since April 1, 2000, there have
been no recalls or withdrawals of products produced or sold by
any Acquired Company.
7.25. CUSTOMERS AND SUPPLIERS. Schedule 7.25 sets forth a list of
(i) the ten (10) largest customers of the Businesses based on
sales during the period May 28, 2001, through February 24,
2002 (and through March 31, 2002, with respect to Australia
Operating Company), showing the approximate total sales to
each such customer during such periods and (ii) the ten (10)
largest suppliers of the Businesses based on purchases during
the period May 28, 2001, through February 24, 2002 (and
through March 31, 2002,
65
with respect to Australia Operating Company), showing the
approximate total purchases by the Businesses from each such
supplier during such periods. To the Knowledge of ConAgra,
since the Balance Sheet Date, there has not been any material
adverse change in the business relationship among the Acquired
Companies with any customer or supplier named on Schedule
7.25.
8. REPRESENTATIONS AND WARRANTIES OF ACQUISITION LP. Acquisition LP
hereby represents and warrants to ConAgra as set forth below. Except to the
extent that the provisions of a particular representation and warranty expressly
provide that it is made as of a specified date, each of the following
representations and warranties shall be made as of the date of this Agreement
and shall constitute continuing representations and warranties made as of each
date after the date of this Agreement prior to and including the Closing Date.
8.1. ORGANIZATION, GOOD STANDING AND POWER. Acquisition LP is a
limited partnership duly organized and validly existing under
the laws of the State of Delaware and has the power to own,
operate and lease its properties and to carry on its business
as now being conducted. Booth Creek Management Corporation and
Affiliates of Hicks, Muse, Xxxx & Xxxxx Incorporated own all
the outstanding equity interests in Acquisition LP.
Acquisition LP has all requisite power and authority to enter
into the Transaction Documents to which it is a party and to
consummate the transactions contemplated hereby and thereby.
The execution and delivery of the Transaction Documents by
Acquisition LP and the consummation by Acquisition LP of the
transactions contemplated hereby and thereby have been duly
authorized by all necessary action on the part of Acquisition
LP. This Agreement has been, and at the Closing each of the
other Transaction Documents to which Acquisition LP is a party
will be, duly executed and delivered by Acquisition LP. This
Agreement constitutes and, upon execution and delivery
thereof, the other Transactions Documents to which Acquisition
LP is a party will constitute, the valid and binding
obligations of Acquisition LP, enforceable against it in
accordance with its respective terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to
general principles of equity.
8.2. GOVERNMENT AUTHORIZATION. The execution, delivery and
performance by Acquisition LP of the Transaction Documents to
which it is a party requires no consent, approval, order or
authorization of, or registration, declaration or filing with,
any Governmental Authority other than (a) the filing of a
premerger notification report under the HSR Act, (b)
application requirements, if any, of the Securities Act and
state securities
66
or blue sky laws; and (c) compliance with any applicable
non-United States laws intended to prohibit, restrict, limit
or regulate actions having the purpose or effect of
monopolization or restraint of trade or regulation of foreign
investment, including, without limitation, FATA.
8.3. EFFECT OF AGREEMENT. The execution, delivery and performance
of the Transaction Documents by Acquisition LP and the
consummation by Acquisition LP of the transactions
contemplated hereby and thereby will not, with or without the
giving of notice or the lapse of time or both, assuming
compliance with the matters referred to in Section 8.2, (i)
violate, conflict with, or result in any breach of any
provision of its certificate of limited partnership or any
partnership, voting or similar agreement, or (ii) violate any
Law applicable to Acquisition LP.
8.4. BROKERS AND FINDERS. Except in respect to Xxxxx, Muse & Co.
Partners, L.P. and Booth Creek Management Corporation,
Acquisition LP has not employed any investment banker, broker
or finder or incurred or reasonably expects to incur any
Liability for any brokerage fees, commissions or finders fees
in connection with the transactions contemplated by the
Transaction Documents.
8.5. FINANCING. Acquisition LP has provided to ConAgra a true and
correct copy of (i) the senior credit facilities commitment
letter, dated May 20, 2002, from Citicorp North America, Inc.,
Xxxxxxx Xxxxx Xxxxxx Inc., JPMorgan Chase Bank and X.X. Xxxxxx
Securities Inc., a copy of which is attached hereto as Exhibit
8.5(a) (the portions thereof relating to the Senior Credit
Facilities (as defined therein) shall be referred to as the
"Senior Bank Commitment Letter" and the portions thereof
relating to the Senior Bridge Facility (as defined therein)
shall be referred to as the "Bridge Commitment Letter"), (ii)
the engagement letter dated May 20, 2002, by and among Xxxxxxx
Xxxxx Barney Inc., X.X. Xxxxxx Securities Inc. and Acquisition
LP, a copy of which is attached hereto as Exhibit 8.5(b) (the
"Engagement Letter"), (iii) the commitment letter from Fund V,
dated May 20, 2002 (the "Fund V Commitment Letter"), a copy of
which is attached hereto as Exhibit 8.5(c), and (iv) the
Subscription Agreement from Greeley Investments, LLC
("Gillco"), dated May 20, 2002 (the "Gillco Subscription
Agreement"), a copy of which is attached hereto as Exhibit
8.5(d) (the Fund V Commitment Letter and the Gillco
Subscription Agreement are herein collectively referred to as
the "Commitment Letters"). As provided therein, the Senior
Bank Commitment Letter is assignable by Acquisition LP to U.S.
Acquisition Co. and Australia Acquisition Co. As provided
therein, the Bridge Commitment Letter is assignable by
Acquisition LP to U.S. Acquisition Co. The Commitment Letters
have not been amended and are in full force and effect.
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8.6. INVESTMENT PURPOSE. Acquisition LP is purchasing the
Acquisition LP Holdco Stock for investment only and not with a
view to resale or other disposition. Acquisition LP
acknowledges that the Acquisition LP Holdco Stock is not being
registered under the securities laws of the United States or
any state thereof or any foreign jurisdiction in reliance upon
one or more exemptions from the registration requirements made
available under such laws.
9. COVENANTS.
9.1. COVENANTS OF CONAGRA.
9.1.1. CONDUCT OF BUSINESS. During the period from the date
hereof to the Closing Date, unless Acquisition LP shall
otherwise consent in writing (which consent will not be
unreasonably withheld) or as contemplated by this
Agreement, ConAgra covenants and agrees that ConAgra shall
cause the Acquiring Companies and Acquired Companies (with
respect to any covenant of ConAgra relating to either of
Better Beef LLC or Colorado Feed LLC, to the extent such
company is not Controlled by ConAgra, ConAgra shall use
its reasonable efforts to comply with such covenant) to
(a) conduct and operate their business in all material
respects in the usual and ordinary course consistent with
past practice, (b) use their reasonable commercial efforts
to preserve intact their business organizations and
preserve their relationships with customers, suppliers and
others having business dealings with them, and (c) use
their reasonable commercial efforts to keep available the
services of their present officers and key employees and
the individuals listed on Exhibit 9.1.1 ("Management").
Without limiting the generality of the foregoing, unless
Acquisition LP shall otherwise consent in writing (which
consent will not be unreasonably withheld) or as otherwise
contemplated by this Agreement, during the period from the
date hereof to the Closing Date, ConAgra shall cause each
Acquiring Company and Acquired Company (with respect to
any covenant of ConAgra relating to either Better Beef LLC
or Colorado Feed LLC, to the extent such company is not
Controlled by ConAgra, ConAgra shall use its reasonable
efforts to comply with such covenant) not to (except as
otherwise contemplated herein):
(a) adopt or propose any change in its Charter
Documents;
(b) except as set forth on Exhibit 9.1.1(b), authorize
for issuance, issue, deliver, sell, pledge, dispose
of, encumber or grant any Lien on, or authorize or
propose the issuance, delivery, sale, pledge,
disposition of, encumbrance or grant of any Lien
on, any shares of its capital stock, or other
voting securities or any securities convertible
into or exercisable for, or any rights, warrants,
commitments or options to acquire, any such
68
securities or voting securities or any other
ownership interest (or interest the value of which
is derived by reference to any of the foregoing);
(c) acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial
equity interest in or a substantial portion of the
assets of, or by any other manner, any business or
any Person or division thereof or otherwise acquire
or agree to acquire any assets (other than an
acquisition which is not material in nature to the
operation of the Businesses taken as a whole);
(d) sell, abandon or otherwise dispose of, or pledge,
mortgage or otherwise subject to any Lien any
material assets of an Acquired Company or the
Businesses other than the sale or disposition of
its products or inventory in the ordinary course of
business consistent with past practice;
(e) make any change in any method of accounting or
accounting practice, except as required by
applicable Law or to comply with GAAP;
(f) split, combine, divide, distribute or reclassify
any shares of its capital stock (or other ownership
interests), declare, pay or set aside for payment
any dividend or other distribution in respect of
its capital stock (or other ownership interests)
(whether in cash, shares of stock or otherwise), or
directly or indirectly, redeem, purchase or
otherwise acquire any shares of its capital stock
(or other ownership interests) or other securities;
(g) incur or assume any indebtedness for borrowed funds
(including obligations in respect of capital
leases), assume, guarantee, endorse, or otherwise
become liable or responsible (whether directly,
contingently, or otherwise) for the obligations of
any other Person or make any loans, advances or
capital contributions to, or investments in, any
Person (other than (i) advances to employees in the
ordinary course of business and consistent with
past practice, and (ii) loans, advances or other
indebtedness extended by ConAgra or a Subsidiary
thereof relating to the Feed Lot Business and
arising in the ordinary course of business);
(h) adopt or amend any Employee Benefit Plan or
collective bargaining agreement, or increase in any
manner the compensation or fringe benefits of any
director, officer or employee or pay any benefit
other than pursuant to an existing agreement (other
than (i) the adoption or amendment of the
69
collective bargaining agreements resulting from
current negotiations relating to the Louisville,
Kentucky facility, and (ii) the increase of
salaries or compensation in the ordinary course of
business, provided that there shall be no increase
in salary or compensation for the key employees
listed on Exhibit 9.1.1(h) hereto);
(i) make any material settlement of or compromise any
material Tax Liability, change any material Tax
election or material Tax method of accounting, or
make any new material Tax election or adopt any new
material Tax method of accounting that would
adversely affect the Tax Liability of the Acquired
Companies for any period ending after the Closing
Date;
(j) pay or discharge any material claims or Liabilities
(absolute, accrued, asserted or unasserted,
contingent or otherwise), other than (x) with
respect to the California Xxx Litigation or Korean
Xxx Litigation or (y) in the ordinary course of
business and consistent with past practice; or fail
to pay or otherwise satisfy (except if being
contested in good faith) any accounts payable,
claims or Liabilities on a basis, and within the
time, consistent with past practice;
(k) fail to maintain working capital in an amount
materially consistent with historical practices
taking into consideration business and market
conditions;
(l) change in any material respect its existing
practices and procedures with respect to the
collection of accounts receivable;
(m) except as set forth on Exhibit 9.1.1(m), enter into
any agreement or contract that would constitute a
Company Material Contract if such were in force as
of the date hereof or amend or modify, in any
material respect, any Company Material Contract or
obligation thereunder;
(n) permit any Acquiring Company to engage in any
business activity or incur any Liability, except as
specifically required by this Agreement;
(o) encourage any customer of the Businesses to
purchase or maintain an inventory of products with
respect to the Businesses at a level in excess of
the level of inventory of such products
historically purchased or maintained by such
customer with the knowledge and intention that such
action would result in decreased orders by such
customer after the
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Closing as compared to the normal historical orders
of such customer; or
(p) agree or commit to do any of the actions prohibited
by paragraphs (a) through (o) of this Section
9.1.1.
9.1.2. ACCESS TO INFORMATION. During the period from the date
hereof until the Closing Date, ConAgra will, and will
cause the Acquired Companies (with respect to Better Beef
LLC and Colorado Feed LLC, to the extent such company is
not Controlled by ConAgra, ConAgra shall use its
reasonable efforts to cause such companies) and their
respective employees, officers, auditors and agents to,
give Acquisition LP and its counsel, financial advisors,
accountants and other authorized representatives (except
to the extent not permitted under applicable Law as
advised by counsel) reasonable access during normal
business hours to each Acquired Company's (other than
Colorado Feed LLC and Better Beef LLC) and the Businesses'
books and records and properties, plants and personnel.
9.1.3. INTERIM FINANCIAL INFORMATION. Within fifteen (15) days
following the end of each month beginning with the month
ending May 2002, and prior to the Closing, ConAgra shall
deliver to Acquisition LP a copy of ConAgra's unaudited
internally prepared management report of each of (x) the
Processing Companies and (y) the Feed Lot Business for the
month then ended, specifically including the Senior
Financial Officer Letters, consistent with prior practice
(collectively, the "Monthly Reports"). Within thirty (30)
days following the end of each fiscal quarter beginning
with the fiscal quarter ending May 2002, and prior to the
Closing, ConAgra shall deliver to Acquisition LP a copy of
ConAgra's unaudited internally prepared quarterly balance
sheet and income statement of each of (x) the Processing
Companies and (y) the Feed Lot Business for the quarter
then ended (collectively, the "Quarterly Statements").
Acquisition LP acknowledges that the Monthly Reports are
not and will not be prepared in accordance with GAAP. The
Quarterly Statements shall be prepared in accordance with
GAAP (except as disclosed therein and except that the
Quarterly Statements will contain no footnotes and will be
subject to year end adjustments).
9.1.4. CASH MANAGEMENT. During the period from the date hereof to
the Closing Date, U.S. Beef Company, U.S. Pork Company and
their respective Subsidiaries shall continue to
participate in ConAgra's cash management program. During
the period from the date hereof to the Closing Date,
Australia Operating Company and its Subsidiaries shall
continue to participate in ConAgra's cash management
program. Subject to Sections 2.1.20 and 9.1.1(k), all cash
generated by U.S. Beef Company, U.S. Pork Company and
their respective Subsidiaries
71
prior to the Effective Time, and all cash generated by
Australia Operating Company and its Subsidiaries prior to
the Closing, (including all lock box receipts) shall be
retained by ConAgra, except to the extent accrued as an
asset on the Final Processing Closing Balance Sheet (and
taken into account in calculating the Aggregate
Consideration) or Final Cattleco Closing Balance Sheet
(and taken into account in determining the Cattleco
Stockholder Net Investment).
9.2. COVENANTS OF ACQUISITION LP, HOLDCO AND/OR THE ACQUIRED
COMPANIES.
9.2.1. GUARANTEES. Prior to the Closing, ConAgra shall use
commercially reasonable efforts to cause U.S. Acquisition
Co. to be substituted in all respects for ConAgra and its
Affiliates (other than the Acquired Companies), and cause
ConAgra and its Affiliates (other than the Acquired
Companies) to be released, effective as of the Closing or
as soon as possible thereafter, in respect of all
obligations of ConAgra and its Affiliates (other than the
Acquired Companies) under each of the guarantees,
indemnities, bonding arrangements, letters of credit and
letters of comfort given by ConAgra or its Affiliates
(other than the Acquired Companies) for the benefit of the
Acquired Companies identified on Exhibit 9.2.1 hereto (the
"Guarantees"). Except as otherwise set forth in this
Section 9.2.1, as of the Closing, all Guarantees for which
the substitution and release referred to in the
immediately preceding sentence has not been obtained as of
the Closing shall be terminated; provided, however, that
notwithstanding the foregoing, (i) the parties recognize
that each Guarantee relating to a hedge not settled as of
the Closing Date shall stay in place with respect to such
hedge until such hedge is settled and shall be subject to
the indemnification obligations of Holdco set forth below,
and (ii) the Deed of Cross Guarantee shall be terminated
in accordance with Section 2.1.22. If any such release
cannot be obtained as to a Guarantee, after the Closing,
Holdco shall indemnify and hold the ConAgra Indemnified
Parties harmless from and against any Liability relating
to the Guarantee not released, and shall use its
commercially reasonable efforts to insure that no
additional obligations arise under the Guarantees not
released after the Effective Time. To the extent any
provisions of this Section 9.2.1 conflict with or differ
from provisions of the Transition Services Agreement with
respect to the subject matter of this Section 9.2.1, the
provisions of the Transition Services Agreement shall
control.
9.2.2. CONTRACTS. The parties acknowledge that contracts relating
to the Business may have been originally entered into or
are currently in the name of ConAgra or its Affiliates.
Such contracts have been or, subject to Section 9.8, will
be assigned to the appropriate Acquired Company at or
prior to Closing pursuant to Sections 2.1.6 and 2.1.17.
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After the Closing, Holdco shall indemnify and hold the
ConAgra Indemnified Parties harmless from and against all
Liability under all such assigned contracts.
9.2.3. DEBT FINANCING.
(a) Acquisition LP will use its commercially reasonable
efforts (including preparing the necessary offering
circulars, private placement memoranda,
prospectuses, registration statements or other
offering documents or marketing materials and
negotiating definitive loan documentation providing
for funding conditions not materially more onerous
than those set forth in the Senior Bank Commitment
Letter or the Bridge Commitment Letter, as the case
may be) in order for (x) U.S. Acquisition Co. to
consummate by the Termination Date (i) the senior
secured financing contemplated by the Senior Bank
Commitment Letter, (ii) the sale of debt securities
in an aggregate principal amount of Four Hundred
Million United States Dollars ($400,000,000) (as
such amount may be adjusted, as appropriate, as
contemplated by the Fee Letter), and (iii) if such
debt securities are not issued in such aggregate
principal amount, the bridge financing contemplated
by the Bridge Commitment Letter and (y) Australia
Acquisition Co. to obtain by the Termination Date
the Australian financings contemplated by the
Senior Bank Commitment Letter; provided that in no
event shall Acquisition LP have any obligation
hereunder to proceed to the Closing under the terms
of the bridge loan contemplated by the Bridge
Commitment Letter at any time prior to the
Termination Date. In the event that either the
Senior Bank Commitment Letter or the Bridge
Commitment Letter expires or is terminated for any
reason, Acquisition LP shall (A) promptly notify
ConAgra of such expiration or termination and the
reasons therefore and (B) use its commercially
reasonable efforts, until the Termination Date, to
obtain alternate financing for the transactions
contemplated by this Agreement; provided, however,
that Acquisition LP shall not be required to obtain
alternate financing on terms materially less
favorable to the borrower thereunder than those set
forth in the Senior Bank Commitment Letter or the
Bridge Commitment Letter, as the case may be.
(b) If Acquisition LP requests, ConAgra shall
reasonably cooperate, shall cause Holdco and each
Acquired Company to reasonably cooperate, and shall
instruct its independent accountants to reasonably
cooperate, at any time prior to the Closing, and
after the Closing, with respect to (i) the senior
secured financing contemplated by the Senior Bank
73
Commitment Letter, (ii) the sale of senior notes as
contemplated by the Engagement Letter in an
aggregate principal amount of Four Hundred Million
United States Dollars ($400,000,000) (as such
amount may be adjusted, as appropriate, as
contemplated by the Fee Letter), (iii) if such debt
securities are not issued in such aggregate
principal amount, the bridge financing contemplated
by the Bridge Commitment Letter, (iv) the
Australian financings contemplated by the Senior
Bank Commitment Letter, (v) if the bridge financing
contemplated by the Bridge Commitment Letter is
made, the private placement of debt securities, the
proceeds of which are to be used to refinance such
bridge loan, (vi) any shelf registration statement
filed following the Closing with respect to the
Exchange Securities (as defined in the Senior Bank
Commitment Letter and the Bridge Commitment
Letter), and (vii) any registration statement filed
following the Closing relating to a Registered
Exchange Offer (as described in the Senior Bank
Commitment Letter and the Bridge Commitment Letter)
(including providing reasonable assistance in the
preparation of one or more offering circulars,
private placement memoranda, prospectuses,
registration statements or other offering documents
or marketing materials relating to a debt financing
or any other filings that may be made with the U.S.
Securities and Exchange Commission in connection
therewith). Such cooperation shall include (A)
using reasonable commercial efforts to provide or
cause to be provided each of the historical
financial statements relating to the Businesses,
the related "comfort" letters of ConAgra's
accountants thereon and the other materials set
forth in Exhibit 9.2.3(b), in each case on or
before the applicable date set forth in Exhibit
9.2.3(b); (B) furnishing to its independent
accountants such customary management
representation letters as such accountants may
reasonably require of ConAgra as a condition to its
execution of any required accountant's consents
necessary in connection with the delivery of any
"comfort" letters reasonably requested by the
financing sources in connection with the
contemplated financings; (C) causing senior
management, representatives, advisors and
appropriate officers and members of the management
team of ConAgra and the Acquired Companies to
participate, at the request of Acquisition LP, and
at such times and places as Acquisition LP may
request, in drafting meetings and other
informational meetings with potential lenders,
presentations and other activities in connection
with the "road shows"; and (D) taking such other
actions within the control of ConAgra or its
Affiliates reasonably necessary to satisfy the
conditions
74
precedent provided for in the Senior Bank
Commitment Letter, the Bridge Commitment Letter,
and the definitive documentation with respect to
the Facilities (as defined in the Senior Bank
Commitment Letter and the Bridge Commitment
Letter), including, without limitation, actions
relating to obtaining or perfecting Liens,
releasing Liens, providing access to properties and
assets for third party appraisals, furnishing
officers' certificates, obtaining consents,
establishing new lock-boxes and implementing a new
cash management system.
(c) The unaudited interim and/or audited historical
financial statements, if any, relating to the
Businesses for periods ending on or after May 27,
2001, and prior to the Closing that are included in
Exhibit 9.2.3(b), and any pro forma financial
statements that are included in Exhibit 9.2.3(b)
and are required to be provided or caused to be
provided by ConAgra in accordance with Section
9.2.3(b)(A) and which are included in the offering
memorandum relating to the initial offering of the
debt securities or the subsequent registration
statement registering the exchange or refinancing
of such debt securities shall be accompanied by a
certificate (the "Representation and Warranty
Certificate") in the form of Exhibit 9.2.3(c).
9.2.4. EQUITY FINANCING. Acquisition LP shall complete the
purchase of the equity interests in Holdco pursuant to the
terms of the Fund V Commitment Letter and the Gillco
Subscription Agreement. Acquisition LP shall not make any
change in the terms thereof without ConAgra's prior
written consent, such consent not to be unreasonably
withheld.
9.3. INSURANCE MATTERS. Holdco acknowledges that the Acquired
Companies are covered by certain insurance policies and
insurable risk programs made available through ConAgra as
described on Exhibit 9.3. ConAgra shall provide that these
policies and insurable risk programs shall be continued for a
ninety (90) day period following June 1, 2002. Holdco shall
use its reasonable efforts to cause the Acquired Companies to
implement their own insurance policies and programs as of the
Closing Date. ConAgra shall use its reasonable efforts to
assist Holdco in obtaining any refunds payable in respect of
any ConAgra policies or programs that are cancelled as of the
Closing Date. Subject to the provisions of Section 9.7.4, with
respect to any loss, Liability or damage relating to,
resulting from or arising out of the conduct of the Businesses
on or prior to the Closing Date for which ConAgra would be
entitled to assert, or cause any Affiliate or other Person to
assert, a claim for recovery under any policy of insurance
maintained by or for the benefit of ConAgra or any Affiliate
thereof in respect of the Businesses, at the request of
Holdco, (x) ConAgra shall use its reasonable efforts to
assert, or to assist
75
Holdco or its Subsidiaries to assert, one or more claims under
such insurance covering such loss, Liability or damage if
neither Holdco nor any Subsidiary thereof is not itself
entitled to assert such claim, but ConAgra or an Affiliate
thereof is so entitled and (y) ConAgra shall provide Holdco
with access to any applicable insurance policies.
9.4. APPROVALS AND CONSENTS.
9.4.1. Subject to the terms and conditions herein provided and
applicable legal requirements, each of the parties hereto
agrees to use its commercially reasonable efforts to take,
or cause to be taken, all action, and to do, or cause to
be done, and to assist and cooperate with the other
parties hereto in doing, as promptly as practicable, all
things necessary, proper or advisable under applicable
Laws to ensure that the conditions set forth in Article 10
are satisfied and to consummate and make effective the
transactions contemplated by this Agreement.
9.4.2. ConAgra and Acquisition LP shall use their respective
reasonable best efforts to obtain as promptly as
practicable all consents, waivers, approvals,
authorizations or permits of, or registration or filing
with or notification to, any Governmental Authority or any
other Person required in connection with, and waivers of
any violations, defaults or breaches that may be caused
by, such party's consummation of the transactions
contemplated by this Agreement.
9.4.3. Each party hereto shall promptly inform the other of any
material communication from the FTC, the DOJ, FIRB or any
other Governmental Authority regarding any of the
transactions contemplated by this Agreement. If any party
hereto or any Affiliate thereof receives a request for
additional information or documentary material from any
such Governmental Authority with respect to the
transactions contemplated by this Agreement, then such
party shall use best efforts to cause to be made, as soon
as reasonably practicable and after consultation with the
other party, an appropriate response in compliance with
such request.
9.4.4. Without limiting the generality of the foregoing,
Acquisition LP and ConAgra will use their reasonable best
efforts to obtain all authorizations or waivers required
under the HSR Act and FATA to consummate the transactions
contemplated hereby, including, without limitation, making
all filings with the Antitrust Division of the DOJ, the
FTC and FIRB required in connection therewith (the initial
filings to occur no later than five (5) business days
following the execution and delivery of this Agreement)
and responding as promptly as practicable to all inquiries
received from the DOJ, the FTC or FIRB for additional
information or documentation. Subject to reimbursement by
Holdco at the Closing pursuant to Section 15.3,
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ConAgra and Acquisition LP shall pay in equal amounts all
filing fees associated with the above referenced filings.
Each of Acquisition LP and ConAgra shall furnish to the
other such necessary information and reasonable assistance
as the other may request in connection with its
preparation of any filing or submission which is necessary
under the HSR Act or FATA. Acquisition LP and ConAgra
shall keep each other apprised of the status of any
communications with, and any inquiries or requests for
additional information from, the FTC, the DOJ and FIRB.
9.4.5. NO SOLICITATION. Prior to the Closing, neither Acquisition
LP nor its Affiliates or representatives will, directly or
indirectly, solicit or initiate any inquiries or the
making of any proposal with respect to any purchase or
acquisition of, or joint venture or similar transaction
involving, any business conducted in the United States or
Australia that competes with the Businesses or negotiate,
explore or otherwise engage in discussions with any person
(other than ConAgra and its representatives) with respect
to any such transaction.
9.5. CHARTER DOCUMENTS. During the six (6) year period following
the Closing Date, Holdco shall not, and shall cause the
Acquired Companies not to, amend, alter or otherwise modify
their respective Charter Documents in any manner that would
adversely affect or otherwise prejudice the indemnity rights
or limitations on Liability of any Person who may be entitled
to indemnification by the Acquired Companies. The Persons to
whom this Section 9.5 applies shall be third party
beneficiaries of this Section 9.5, each of whom may enforce
the provisions of this Section 9.5.
9.6. INVESTIGATION AND AGREEMENT BY THE PARTIES; NO OTHER
REPRESENTATIONS OR WARRANTIES.
(a) Acquisition LP, on the one hand, and ConAgra, on
the other hand, each acknowledge and agree that
they have made their own inquiry and investigation
into, and, based thereon, have formed an
independent judgment concerning, the other party
and its Subsidiaries and their businesses and
operations, and such party has requested such
documents and information from the other party as
such party considers material in determining
whether to enter into this Agreement and to
consummate the transactions contemplated in this
Agreement. Acquisition LP, on the one hand, and
ConAgra, on the other hand, acknowledge and agree
that they have had an opportunity to ask all
questions of and receive answers from the other
party with respect to any matter such party
considers material in determining whether to enter
into this Agreement and to consummate the
transactions contemplated in this Agreement. In
connection with each
77
party's investigation of the other party and its
Subsidiaries and their businesses and operations,
each party and its representatives have received
from the other party or its representatives certain
projections and other forecasts for the other party
and its Subsidiaries and certain estimates, plans
and budget information. Each party acknowledges and
agrees that there are uncertainties inherent in
attempting to make such projections, forecasts,
estimates, plans and budgets; that such party is
familiar with such uncertainties; that such party
is taking full responsibility for making its own
evaluation of the adequacy and accuracy of all
estimates, projections, forecasts, plans and
budgets so furnished to it or its representatives;
and that such party will not (and will cause all of
its respective Subsidiaries or other Affiliates or
any other Person acting on its behalf to not)
assert any claim or cause of action against the
other party or any of the other party's direct or
indirect partners, directors, officers, employees,
agents, stockholders, Affiliates, consultants,
counsel, accountants, investment bankers or
representatives with respect thereto, or hold any
such other Person liable with respect thereto.
(b) Each of Acquisition LP and Holdco, on the one hand,
and ConAgra, on the other hand, agree that, except
for the representations and warranties made by the
other party that are expressly set forth in this
Agreement and the other Transaction Documents, the
other party has not made and shall not be deemed to
have made to such party or to any of its
representatives or Affiliates any representation or
warranty of any kind. Without limiting the
generality of the foregoing, each party agrees that
neither the other party nor any of its Affiliates
makes or has made any representation or warranty to
such party or to any of its representatives or
Affiliates with respect to:
(i) any projections, forecasts, estimates, plans
or budgets of future revenues, expenses or
expenditures, future results of operations
(or any component thereof), future cash flows
(or any component thereof) or future
financial condition (or any component
thereof) of the other party or any of its
Subsidiaries or the future business,
operations or affairs of the other party or
any of its Subsidiaries heretofore or
hereafter delivered to or made available to
such party or its counsel, accountants,
advisors, lenders, representatives or
Affiliates; and
(ii) any other information, statement or documents
heretofore or hereafter delivered to or made
available to
78
such party or its counsel, accountants,
advisors, lenders, representatives or
Affiliates with respect to the other party or
any of its Subsidiaries or the business,
operations or affairs of the other party or
any of its Subsidiaries, except to the extent
and as expressly covered by a representation
and warranty made by the other party and
contained in this Agreement and the other
Transaction Documents.
9.7. CERTAIN CLAIMS.
9.7.1. COMPANY LITIGATION. Acquisition LP acknowledges that
various Actions are now pending as listed on Exhibit 9.7.1
or may arise after Closing and result from operations of
the Businesses but name both (i) one or more Acquired
Companies and (ii) ConAgra (and/or its Affiliates) as a
party thereto (the "Company Litigation"); provided,
however, that for purposes of this Agreement, the term
"Company Litigation" shall not include the California Xxx
Litigation, the Leuking Action or other Cattlemen
Litigation. Except as to matters subject to ConAgra's
indemnification obligations under Articles 6, 12 and 13,
after the Closing Holdco shall indemnify and hold the
ConAgra Indemnified Parties harmless from and against all
Liability relating to the Company Litigation including,
without limitation, all costs and expenses of defending
the Company Litigation.
9.7.2. PROCEDURE. ConAgra shall give prompt written notice to
Holdco of the commencement or assertion of any action,
proceeding, demand or claim in respect of any Company
Litigation for which ConAgra seeks indemnification under
Section 9.7.1. Subject to the terms and conditions set
forth below, Holdco shall have the right to assume control
of the defense of, settle or otherwise dispose of such
Company Litigation on such terms as it deems appropriate.
Notwithstanding anything contained in Section 12.4 to the
contrary, Holdco may settle or compromise any such Company
Litigation (i) with the written consent of ConAgra, which
consent shall not be unreasonably withheld, or (ii)
without such consent, so long as such settlement or
compromise includes (A) an unconditional release of
ConAgra and/or its Affiliates, as the case may be, from
all Liability in respect of such Company Litigation, (B)
does not subject ConAgra or its Affiliates to any
injunctive relief or other equitable remedy, and (C) does
not include a statement or omission of fault, culpability
or failure to act by or on behalf of ConAgra or its
Affiliates. ConAgra and its Affiliates shall have the
right, but not the obligation, to participate at their own
expense in the defense of any Company Litigation and any
such participation shall not in any way diminish or lessen
the obligations of Holdco or the Acquired Companies
hereunder. ConAgra shall , and shall cause its Affiliates
to, reasonably cooperate with Holdco, at
79
Holdco's cost and expense, in connection with the defense
of any Company Litigation and, in connection therewith,
shall furnish on a timely basis all such information,
records, documents and testimony and attend such
conferences, discovery proceedings, hearings, trials and
appeals as may be reasonably requested by Holdco, and
provide, on a timely basis, access to and availability of
its employees for purposes of such litigation, including,
without limitation, for purposes of assisting in trial
preparation and the conduct of any trial.
9.7.3. XXX LITIGATION. Notwithstanding anything contained in
Section 12.4 to the contrary, the parties hereto agree
that ConAgra, at its cost and expense, shall retain all
claims and causes of action relating to, and shall have
the sole right to control (a) the litigation captioned
ConAgra, Inc., et al. vs. Gap Xx Xxx, et al., Case No.
99-04791 currently pending in the United States District
Court, Central District of California, including any
appeals thereof (the "California Xxx Litigation"), and (b)
the Korean trademark proceedings between ConAgra and Gap
Xx Xxx, Xxxxx Xxx, and companies under their control,
including Xxxxxxx Korea Beef, Inc., a Xxx created entity,
over the ownership and use of the trademark "Xxxxxxx" in
Korea as described on Exhibit 9.7.3 (the "Korean Xxx
Litigation"). ConAgra shall be entitled to receive and
retain the benefits of any judgment awarded or settlement
reached pursuant to the California Xxx Litigation and
Holdco shall be entitled to receive and retain any
judgment awarded or settlement reached pursuant to the
Korean Xxx Litigation, or to have any trademark rights
acquired as a result of the Korean Xxx Litigation, or any
other related benefits, assigned to Holdco. Holdco shall,
and shall cause the Acquired Companies to, reasonably
cooperate with ConAgra, at ConAgra's cost and expense, in
respect to the California Xxx Litigation and Korean Xxx
Litigation and, in connection therewith shall furnish, on
a timely basis, all information, records, documents and
testimony and attend such conferences, discovery
proceedings, hearings, trials and appeals as may be
reasonably requested by ConAgra and provide, on a timely
basis, access to, and availability of, Company Employees
for purposes of such litigation, including, without
limitation, for purposes of assisting in trial preparation
and the conduct of any trial. ConAgra may settle or
compromise the California Xxx Litigation (i) with the
written consent of Holdco, which consent shall not be
unreasonably withheld or delayed, or (ii) without such
consent, so long as such settlement or compromise includes
(A) an unconditional release of Holdco and all Acquired
Companies from all Liability in respect of the California
Xxx Litigation, (B) does not subject Holdco or any
Acquired Company to any injunctive relief or other
equitable remedy, and (C) does not include a statement or
omission of fault, culpability or failure to act by or on
behalf of Holdco or any Acquired Company. ConAgra may not
settle, dismiss or compromise the Korean Xxx
80
Litigation without the prior consent of Holdco, which
consent shall not be unreasonably withheld or delayed.
Notwithstanding anything to the contrary contained herein,
in the event ConAgra fails to vigorously pursue the claims
relating to the Korean Xxx Litigation, Holdco shall have
the sole and exclusive right to control such litigation.
Holdco shall have the right, but not the obligation, to
participate in the California Xxx Litigation and the
Korean Xxx Litigation and any such participation shall not
in any way diminish or lessen the obligations of ConAgra
hereunder.
9.7.4. GARDEN CITY. The parties acknowledge that ConAgra is the
owner of certain insurance claims described in Exhibit
9.7.4(a) (the "Garden City Insurance Claims") that relate
to and arise out of a fire at the fed cattle processing
plant located at Xxxxx 0, Xxxxxxxx Xxxx, Xxxxxx Xxxx,
Xxxxxx. ConAgra shall have the right, at its own cost and
expense, to pursue collection of proceeds or reach a
settlement with respect to the Garden City Insurance
Claims and, except as required in this Section 9.7.4,
retain the proceeds with respect to such Garden City
Insurance Claims. Holdco shall, and shall cause the
Acquired Companies to, reasonably cooperate with ConAgra,
at ConAgra's expense, in connection with the Garden City
Insurance Claims and, in connection therewith, shall
furnish on a timely basis all such information, records,
documents and testimony, including testimony through
affidavits, depositions and court room appearance, and
attend such conferences, discovery proceedings, hearings,
trials and appeals as may be reasonably requested by
ConAgra, and provide, on a timely basis, access to and
availability of Company Employees for purposes of such
action, including, without limitation, for purposes of
assisting in any preparation for proceedings and the
conduct of any proceedings. To the extent ConAgra receives
any cash proceeds attributable to the Garden City beef
business interruption claim as described on Exhibit
9.7.4(b) (the "BI Claim"), ConAgra shall contribute such
cash proceeds, after deducting therefrom all out-of-pocket
costs, reasonable attorneys' fees (including, without
limitation, all fees arising under the Agreement for
Recovery of Fire Related Losses and Fees, dated as of
January 28, 0000, xxxxx XxxXxxx, XxxXxxx Beef Company and
XxXxxxx, North, Xxxxxx & Xxxxx, P.C.), expenses and Taxes
incurred by ConAgra as a direct result of the collection
and realization of such cash proceeds, to the capital of
Holdco (the "Garden City Insurance Capital Contribution")
within five (5) business days following the receipt
thereof. In the event ConAgra makes one or more Garden
City Insurance Capital Contributions, the parties agree
that ConAgra shall not receive any additional shares of
common stock of, or other equity interest in, Holdco in
connection therewith. The parties hereto agree that the
Garden City Insurance Capital Contribution is an
adjustment to the purchase price of the U.S. Beef Company
Stock and shall be reported as such for Income Tax
reporting purposes.
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9.8. UNASSIGNABLE CONTRACTS. If (i) any third-party's (including
any Governmental Authority's) consent or approval to the
assignment or other transfer to the applicable Acquired
Company of a contract to be transferred pursuant to Sections
2.1.6 or 2.1.17 has not been obtained prior to the Closing,
then as to the burdens, obligations, rights or benefits under
or pursuant to such contracts (collectively, the "Rights") not
assignable to the applicable Acquired Company because such
consent or approval has not been obtained:
(a) ConAgra shall, and shall cause its Subsidiaries to,
hold the Rights in trust for the applicable
Acquired Company, for the account and benefit of
the applicable Acquired Company;
(b) After the Closing, Holdco shall, and shall cause
the applicable Acquired Company to take, and
ConAgra shall, and shall cause its Subsidiaries to,
take all such reasonable actions and do all such
things as shall be reasonably necessary or
desirable in order that (i) the value of the Rights
shall be preserved and shall inure to the benefit
of the applicable Acquired Company and such that
all benefits under the Rights may be received by
the applicable Acquired Company and (ii) the
applicable Acquired Company will perform the
burdens and obligations under such Rights; and
(c) After the Closing, ConAgra shall continue to use
its reasonable efforts to obtain such consent or
approval.
9.9. RECORD RETENTION. Except as set forth below and also subject
to Article 13 hereof, Holdco will cause all books and records
of the Acquired Companies (the "Records") to be retained for
seven (7) years after Closing. Following the Closing, ConAgra
shall retain the books and records set forth on Exhibit 9.9
(the "Retained Records") for seven (7) years. During such
term, each party shall allow the other party and its
representatives access to inspect or copy the Records and
Retained Records, as appropriate, during normal business
hours. In the event a party intends to destroy any Records or
Retained Records in its control at the end of such seven-year
term, such party shall first notify the other party at which
time the other party shall have the right to remove the
Records at its own cost. The parties acknowledge that, in the
past, ConAgra and the Acquired Companies have routinely
disposed of certain Records on a periodic basis and have not
retained such Records for seven (7) years. Notwithstanding the
foregoing, ConAgra, Holdco and the Acquired Companies may
continue such routine periodic record destruction so long as,
prior to such destruction, the party intending to destroy the
records notifies the other party of the nature of such
destruction and permits the other party to remove and retain
such Records at its expense.
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9.10. MATERIAL COVENANTS. The parties acknowledge that for purposes
of Sections 10.2(b) and 11.1(d)(B), "material covenants" and
"material obligations" shall include, without limitation: (a)
covenants and obligations involving the mere payment of money,
(b) covenants and obligations, the breach of which could have
the effect of diminishing the Borrowing Base (as defined in
the Senior Bank Commitment Letter), (c) covenants and
obligations, the breach of which could have the effect of
hindering, delaying or frustrating the Closing, (d) covenants
and obligations, the breach of which could have the effect of
hindering, delaying or frustrating the financing pursuant to
the Senior Commitment Letter, the Bridge Commitment Letter or
the Engagement Letter, or (e) covenants and obligations as to
which notice of breach has been given pursuant to Section
11.1(d)(B) and as to which such breach is capable of being,
but has not been, cured, within the cure period provided for
in Section 11.1(d)(B).
9.11. SALE OF RECEIVABLES. ConAgra agrees that as of June 1, 2002,
it will discontinue selling and factoring the receivables (or
interests therein) of the Acquired Companies pursuant to the
Receivables Sale Agreement among ConAgra, Asset Securitization
Cooperative Corporation and Canadian Imperial Bank of
Commerce, or any similar or related arrangement (collectively,
"Factoring Agreements"). ConAgra shall cause all receivables
(or interests therein) of the Acquired Companies, on the
Closing Date, to be at levels at which such receivables would
have otherwise been had they not been subject to the Factoring
Agreements. ConAgra covenants and agrees that, as of the
Closing Date, all receivables (and interests therein) of the
Acquired Companies shall be held by the Acquired Companies
free and clear of all Liens.
9.12. CLOSING MATERIAL ADVERSE EFFECT.
9.12.1. In the event either ConAgra or Acquisition LP notifies the
other party of an occurrence of a Closing Material Adverse
Effect, then Acquisition LP shall have six (6) business
days from the receipt of such notice in which to notify
ConAgra if Acquisition LP waives its rights under Section
10.2(d) and Section 11.1(f) with respect to such Closing
Material Adverse Effect. If Acquisition LP does not elect
to make such waiver, then, if after the date of the
occurrence of such Closing Material Adverse Effect,
ConAgra should receive an unsolicited, bona fide inquiry
from an unrelated third party to acquire the Businesses
("Acquisition Proposal") that ConAgra's Board of Directors
has in good faith concluded (following the receipt of the
advice of its outside legal counsel and its financial
advisors) is, or is reasonably likely to result in, a
Superior Offer (as defined in Section 9.12.2), ConAgra may
then take the following actions: (i) furnish nonpublic
information to the third party making such Acquisition
Proposal, provided that (A)(1) concurrently with
furnishing any such
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nonpublic information to such party, it gives Acquisition
LP written notice of its intention to furnish nonpublic
information and (2) it receives from the third party an
executed confidentiality agreement containing customary
limitations on the use and disclosure of all nonpublic
written and oral information furnished to such third party
on its behalf, the terms of which are at least as
restrictive as the terms contained in the Confidentiality
Agreement, and (B) contemporaneously with furnishing any
such nonpublic information to such third party, it
furnishes such nonpublic information to Acquisition LP (to
the extent such nonpublic information has not been
previously so furnished); and (ii) engage in negotiations
with the third party with respect to the Acquisition
Proposal, provided that concurrently with entering into
negotiations with such third party, it gives Acquisition
LP written notice of its intention to enter into
negotiations with such third party. Thereafter ConAgra
shall provide Acquisition LP as promptly as practicable
oral and written notice setting forth all such information
as is reasonably necessary to keep Acquisition LP informed
in all material respects of the status of any such
Acquisition Proposal. In the event that the Board of
Directors of ConAgra determines that such Acquisition
Proposal is a Superior Offer, it shall promptly give
Acquisition LP notice of such determination and
Acquisition LP shall have two (2) business days from the
receipt of such notice in which to waive such Closing
Material Adverse Effect as a Closing condition pursuant to
Section 10.2(d) and as a termination right pursuant to
Section 11.1(f). In the event Acquisition LP does not
waive such Closing Material Adverse Effect as a Closing
condition and termination right, ConAgra shall have the
right at any time within four (4) business days from its
notice to Acquisition LP to terminate this Agreement
contemporaneously with entering into definitive documents
with respect to such Superior Offer and tendering payment
to Acquisition LP, in immediately available funds such
amount as may be required to reimburse Acquisition LP and
its Affiliates and partners for all out-of-pocket fees,
costs and expenses incurred by any of them in connection
with their due diligence efforts or the transactions
(including, without limitation, the preparation and
negotiation of documentation) contemplated in the
Transaction Documents or in the Senior Bank Commitment
Letter and Bridge Commitment Letter, including, without
limitation, (A) fees, costs and expenses of accountants,
escrow agents, counsel, financial advisors and other
similar advisors, (B) fees paid to any Governmental
Authority, and (C) fees, costs and expenses paid or
payable to third parties under the Senior Bank Commitment
Letter and Bridge Commitment Letter or in connection with
the transactions contemplated therein (collectively, the
"Termination Fee").
9.12.2. CERTAIN DEFINITIONS. "Superior Offer" shall mean an
unsolicited, bona fide written offer made after the
occurrence of Closing Material
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Adverse Effect by an unrelated third party to acquire,
directly or indirectly, the Businesses on terms that the
Board of Directors of ConAgra has in good faith concluded
(following the receipt of advice of its outside legal
counsel and its financial adviser), taking into account,
among other things, all legal, financial, regulatory and
other aspects of the offer and the Person making the
offer, to be more favorable, from a financial point of
view, to ConAgra's stockholders (in their capacities as
stockholders) than the terms of the transactions
contemplated by this Agreement.
10. CONDITIONS PRECEDENT TO OBLIGATIONS.
10.1. CONDITIONS TO EACH PARTY'S OBLIGATIONS. The respective
obligations of each party to consummate the transactions
contemplated herein shall be subject to the satisfaction or
waiver on or prior to the Closing Date of the following
conditions:
(a) GOVERNMENTAL APPROVALS. All authorizations,
consents, orders, declarations or approvals of, or
filings with, or terminations or expirations of
waiting periods imposed by, any Governmental
Authority, legally required for the consummation of
making any of the transactions contemplated hereby
shall have been obtained, shall have been made or
shall have occurred, as the case may be, other than
such authorizations, consents, orders,
declarations, approvals, filings, terminations or
expirations which the failure to so obtain would
not result in a Company Material Adverse Effect.
(b) HSR ACT. The waiting period (and any extension
thereof) under the HSR Act shall have expired or
been terminated.
(c) FATA. The Treasurer of the Commonwealth of
Australia shall have provided advice pursuant to
FATA that there are no objections to the
acquisition of Australia Operating Company in
accordance with the terms of this Agreement. For
purposes of this Agreement, the Treasurer shall be
deemed to have provided such advice:
(i) if Australia Acquisition Co. receives
written advice from the Treasurer or on
his behalf to the effect that there are
no objections in terms of the Federal
Government's foreign investment policy to
the acquisition of Australia Operating
Company either unconditionally or on
terms reasonably acceptable to Australia
Acquisition Co.; or
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(ii) if ten (10) days have elapsed from the
day the Treasurer ceased to be empowered
to make any order under Part II of FATA
in relation to the acquisition of
Australia Operating Company because of
lapse of time, notice of the acquisition
of Australia Operating Company having
been given to the Treasurer under FATA.
(d) NO INJUNCTION. No Governmental Authority having
jurisdiction over ConAgra, Acquisition LP or
Holdco, or any Acquired Company, shall have
enacted, issued, promulgated, enforced or entered
any Law, decree, injunction or other order (whether
temporary, preliminary or permanent) which is then
in effect and has the effect of making the
transactions contemplated herein illegal or
otherwise prohibiting consummation of the
transactions contemplated herein.
(e) FINANCING. As contemplated by Article 2, (x) U.S.
Acquisition Co. and Australia Acquisition Co. shall
have received the proceeds of the financings
contemplated by the Senior Bank Commitment Letter
(or other alternate financing, if any, obtained by
Acquisition LP as contemplated by Section
9.2.3(a)), and (y) U.S. Acquisition Co. shall have
(i) received the proceeds of the bridge loan
contemplated by the Bridge Commitment Letter (or
other alternate financing, if any, obtained by
Acquisition LP as contemplated by Section 9.2.3(a))
or (ii) consummated the Rule 144A offering of the
debt securities as contemplated by the Bridge
Commitment Letter (or other alternate financing, if
any, obtained by Acquisition LP as contemplated by
Section 9.2.3(a)).
10.2. CONDITIONS TO OBLIGATION OF ACQUISITION LP. The obligation of
Acquisition LP to consummate the transactions contemplated
herein shall be subject to the satisfaction on or prior to the
Closing Date of the following additional conditions, unless
waived in writing by Acquisition LP:
(a) REPRESENTATIONS AND WARRANTIES. The representations
and warranties of ConAgra set forth in this
Agreement shall be true and correct in all respects
as of the date of this Agreement and (except to the
extent such representations and warranties speak as
of an earlier date) as of the Closing Date as
though made on and as of the Closing Date, except
for such inaccuracies (without giving effect to any
limitations as to materiality or a Company Material
Adverse Effect set forth in such representations
and warranties) that, individually and in the
aggregate, have not had a Company Material Adverse
Effect.
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Holdco shall have received a certificate signed on
behalf of ConAgra by the Chief Executive Officer,
Chief Financial Officer or Executive Vice President
- Operations Control and Development of ConAgra to
such effect.
(b) PERFORMANCE OF OBLIGATIONS. ConAgra shall have
performed in all material respects all material
covenants and material obligations required to be
performed by it under this Agreement on or prior to
the Closing Date, and Holdco shall have received a
certificate signed on behalf of ConAgra by the
Chief Executive Officer, Chief Financial Officer or
Executive Vice President - Operations Control and
Development of ConAgra to such effect.
(c) [Intentionally Omitted]
(d) CLOSING MATERIAL ADVERSE EFFECT. No Closing
Material Adverse Effect shall have been incurred or
suffered.
10.3. CONDITIONS TO OBLIGATION OF CONAGRA. The obligation of ConAgra
to consummate the transactions contemplated herein shall be
subject to the satisfaction on or prior to the Closing Date of
the following additional conditions, unless waived in writing
by ConAgra:
(a) REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Acquisition LP set forth in this
Agreement shall be true and correct in all respects
as of the date of this Agreement and (except to the
extent such representations and warranties speaks
as of an earlier date) as of the Closing Date as
though made on and as of the Closing Date, except
for such inaccuracies (without giving effect to any
limitations as to materiality or a material adverse
effect set forth in such representations or
warranties) that, individually and in the aggregate
have not had a material adverse effect. ConAgra
shall have received a certificate signed on behalf
of Acquisition LP to such effect.
(b) PERFORMANCE OF OBLIGATIONS. Acquisition LP shall
have performed in all material respects all
material covenants and material obligations
required to be performed by it under this Agreement
on or prior to the Closing Date, and ConAgra shall
have received a certificate signed on behalf of
Acquisition LP to such effect.
(c) ACQUISITION LP OWNERSHIP. Greeley Investments, LLC
and Affiliates of Hicks, Muse, Xxxx & Xxxxx
Incorporated shall own
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as of Closing all of the outstanding equity
interests in Acquisition LP.
11. TERMINATION.
11.1. TERMINATION. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned, at any time
prior to the Closing Date:
(a) by mutual written agreement of ConAgra and
Acquisition LP;
(b) by either ConAgra, on the one hand, or Acquisition
LP, on the other hand, if the Closing shall not
have occurred on or before the earlier of (i)
September 30, 2002, or (ii) the first business day
immediately following the sixtieth (60th) day after
the initial day that actual marketing of the debt
securities contemplated by the Bridge Commitment
Letter begins (which for purposes of this Agreement
shall be the date that the definitive offering
memorandum is first delivered to potential
purchasers of such debt securities); provided that,
if Acquisition LP has delivered to ConAgra a
termination notice as contemplated by Section
11.1(d) and if such termination is ineffective as a
result of a timely cure by ConAgra of the asserted
breach, then Acquisition LP shall have the right,
by means of notice to ConAgra, to extend such date
to a date that is the first business day
immediately following the sixtieth (60th) day after
the tenth (10th) day of the applicable cure period
(the "Termination Date"); provided further that the
party seeking to terminate this Agreement pursuant
to this Section 11.1(b) shall not have breached in
any material respect their obligations under this
Agreement in any manner that shall have proximately
caused the failure to consummate the transactions
contemplated herein on or before the Termination
Date;
(c) prior to the Closing by either ConAgra, on the one
hand, or Acquisition LP, on the other hand, if any
permanent injunction, order, decree or ruling by
any Governmental Authority of competent
jurisdiction preventing the consummation of the
transactions contemplated herein shall have become
final and nonappealable; provided, however, that
the party seeking to terminate this Agreement
pursuant to this Section 11.1(c) shall have used
its reasonable best efforts to remove such
injunction or overturn such action;
(d) by Acquisition LP, at any time, if there shall have
been any (A) breach of one or more representations
or warranties of ConAgra (which has not been
waived), except for breaches
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(without giving effect to any limitation as to
materiality or Company Material Adverse Effect set
forth in such representations and warranties)
which, individually and in the aggregate, have not
had a Company Material Adverse Effect and except
for breaches that result from actions expressly
permitted under or taken pursuant to this
Agreement, or (B) material breach of one or more
material covenants or material obligations set
forth in this Agreement by ConAgra (which has not
been waived), in each case of clause (A) or (B),
which breach or breaches shall not have been cured
within ten (10) days following receipt by ConAgra
of written notice from Acquisition LP of such
breach, and whether or not the breach was (1)
within the control of ConAgra or (2) the result of
ConAgra's actions or inactions;
(e) by ConAgra, at any time, if there shall have been
any (A) breach of one or more representations or
warranties of Acquisition LP (which has not been
waived), except for breaches (without giving effect
to any limitation as to materiality or material
adverse effect set forth in such representations
and warranties) which, individually and in the
aggregate, have not had a material adverse effect
and except for breaches that result from actions
expressly permitted under or taken pursuant to this
Agreement, or (B) material breach of one or more
covenants or agreements set forth in this Agreement
by Acquisition LP (which has not been waived), in
each case of clause (A) or (B), which breach or
breaches shall not have been cured within ten (10)
days following receipt by Acquisition LP of written
notice from ConAgra of such breach, and whether or
not the breach was (1) within the control of
Acquisition LP or (2) the result of Acquisition
LP's actions or inactions;
(f) by Acquisition LP, if any Closing Material Adverse
Effect shall have been incurred or suffered; or
(g) by ConAgra pursuant to Section 9.12 while
contemporaneously (i) entering into definitive
documents with respect to a Superior Offer and (ii)
tendering payment of the Termination Fee pursuant
to Section 9.12.1.
11.2. EFFECT OF TERMINATION. In the event of termination of this
Agreement pursuant to this Section 11, the transactions
contemplated hereby shall be deemed abandoned and this
Agreement shall forthwith become void, except that the
provisions of Section 15.3, Section 15.15, this Section 11.2
and the terms of the Confidentiality Agreement shall survive
any termination of this Agreement; provided, however, that
nothing in this
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Agreement shall relieve any party from liability for any
breach of this Agreement.
12. GENERAL INDEMNITY.
12.1. INDEMNIFICATION BY CONAGRA INDEMNIFIED PARTIES. Subject to the
overall limitations, minimum amounts, time limitations and
limitations on recourse and other limits set forth in this
Article 12:
12.1.1. CONAGRA INDEMNITY. ConAgra agrees, from and after the
Closing Date, to indemnify and hold harmless Holdco and
each Subsidiary of Holdco and each of their respective
officers, directors and employees (collectively, the
"Holdco Indemnified Parties") from and against any and all
damages, losses, claims, Liabilities, demands, charges,
suits, proceedings, penalties, costs and expenses
(including court costs and reasonable attorneys' fees and
expenses incurred in investigating and preparing for any
litigation or proceeding) (collectively, the "Holdco
Indemnified Costs") which any of the Holdco Indemnified
Parties may sustain, or to which any of the Holdco
Indemnified Parties may be subjected, relating to or
arising directly or indirectly out of:
(a) any Environmental Costs or Liabilities arising out
of or in connection with or as a result of any
facts or circumstances existing on or before the
Closing Date relating to the operations of or
property owned or leased or previously owned or
leased by the Acquired Companies at any time on or
before the Closing Date (regardless of whether such
matters have been disclosed in the Schedules to
this Agreement or otherwise) (the "Pre-Existing
Environmental Matters"), including any Holdco
Indemnified Costs that any Holdco Indemnified Party
may sustain in connection with any remediation,
clean-up, modification, repairs, work,
construction, alterations or installations required
as a result of the Pre-Existing Environmental
Matters (except any increased costs to the extent
such increased costs are caused, contributed to or
exacerbated by the actions of any Holdco
Indemnified Party), including, without limitation,
any costs relating to capital improvements,
physical upgrading or maintenance and repairs
required by Environmental Laws which for purposes
of this Section 12.1.1(a) shall be deemed Holdco
Indemnified Costs; provided, however, that this
Subsection (a) shall not be deemed to apply to any
entity or property acquired or leased by a Holdco
Indemnified Party subsequent to the Closing;
(b) any violation of any Labor Laws by the Acquired
Companies existing on or before the Closing Date
(regardless of whether
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such matters have been disclosed in the Schedules
to this Agreement or otherwise);
(c) except with respect to Liabilities arising in
connection with transactions between ConAgra or a
Subsidiary thereof on one hand and a Holdco
Indemnified Party on the other hand pursuant to the
Cattle Supply Agreement, Risk Management Agreement,
Cash Management Agreement, Transition Services
Agreement or By-Products Agreement, any third-party
action (as defined in Section 12.4.1) involving an
Indemnified Party relating to or arising out of the
operation of the Feed Lot Business or the ownership
or use of any of the assets or property used or
held for use by the Feed Lot Business whether
relating or arising prior to, at or after the
Closing; provided, however, that Cattle Holdco and
Cattleco shall not be beneficiaries of this Section
12.1.1(c);
(d) a breach or alleged breach by any of the Acquiring
Companies or Acquired Companies of the terms and
provisions of any agreement entered into governing
the sale and purchase effecting a "Divestiture" (as
such term is used in the Stockholders Agreement) of
all or any portion of the Feed Lot Business or the
assets or property used or held for use by the Feed
Lot Business as contemplated by the Stockholders
Agreement; provided that Cattle Holdco and Cattleco
shall not be entitled to the benefits of the
indemnification provided by this Section 12.1.1(d);
(e) any breach or inaccuracy of any representation or
warranty made by ConAgra and contained in this
Agreement, each Representation and Warranty
Certificate or the certificates delivered pursuant
to Article 10;
(f) any breach or nonfulfillment or nonperformance by
ConAgra of any agreement or covenant of ConAgra in
this Agreement or the certificates delivered
pursuant to Article 10;
(g) the California Xxx Litigation and Korean Xxx
Litigation, including any accrued but unpaid
Liability relating to either preceding, provided,
however, that ConAgra shall have no Liability under
this Article 12 or otherwise in the event the Korea
Xxx Litigation results in the Businesses, Acquired
Companies or Acquiring Companies not having rights
to the Xxxxxxx xxxx in Korea;
(h) except with respect to Liabilities arising in
connection with transactions between ConAgra or a
Subsidiary thereof on one
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hand and a Holdco Indemnified Party on the other
hand pursuant to the Transition Services Agreement,
Preferred Supplier Agreement, Armour Transition
License Agreement, Swift Transition License
Agreement, Hangar License Agreement, Risk
Management Agreement, Cattle Supply Agreement or
By-Products Agreement, any third-party action (as
defined in Section 12.4.1) involving an Indemnified
Party relating to or arising out of the failure by
ConAgra or its Affiliates (other than the Acquiring
Companies and the Acquired Companies) to pay,
perform or discharge any of their respective
Liabilities relating to (x) the conduct of any
business (other than the Businesses) by ConAgra and
its Subsidiaries (other than the Acquiring
Companies and the Acquired Companies), prior to, at
or after the Closing, (y) the ownership and
operation of any assets or property not owned by
any Acquired Company as of the Closing, or (z) the
Divested Companies; or
(i) any third-party action (as defined in Section
12.4.1) that any Holdco Indemnified Party is made a
party to and that results from ConAgra's assertion
of the Garden City Insurance Claims.
12.1.2. PRE-CLOSING CATTLEMEN LITIGATION. ConAgra agrees, from and
after the Closing Date, to indemnify and hold harmless the
Holdco Indemnified Parties from and against (i) judgments
for monetary damages including, without limitation, any
award of fees and expenses, and (ii) monetary settlements,
in either case, to the extent that such:
(a) arises out of (x) the litigation styled Xxxxxx X.
Leuking and Xxxxxx X. Xxxxxxxxx v. ConAgra Foods,
Inc. and ConAgra Beef Company pending in the United
States District Court for the District of Nebraska
as Case No. 4:CV02-3124 (the "Leuking Litigation")
or (y) any future litigation filed against ConAgra
or any Acquiring Company or Acquired Company after
the date of this Agreement that is based primarily
on the substantive facts alleged in the Leuking
Litigation and, in either case, to the extent such
seeks damages resulting from activities of ConAgra
or the Acquired Companies occurring prior to the
Closing Date (the "Pre-Closing Cattlemen
Litigation"); and
(b) only to the extent to which such monetary damages
or monetary settlements result from activities of
ConAgra or the Acquired Companies occurring prior
to the Closing Date (the "Pre-Closing Damages"). In
no event shall ConAgra be
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responsible or liable under this Section 12.1.2 for
(x) any litigation, damages or settlements
associated with operations of the Acquiring
Companies or Acquired Companies after the Closing
Date including, without limitation, any damages or
settlements associated with the Pre-Closing
Cattlemen Litigation that do not constitute
Pre-Closing Damages, (y) any equitable relief
granted in any Pre-Closing Cattlemen Litigation, or
any costs, damages, liabilities or other
consequences of any such equitable relief, or (z)
any costs, damages, liabilities or other
consequences of the Pre-Closing Cattlemen
Litigation that do not constitute Pre-Closing
Damages.
12.2. CATTLECO INDEMNITY. Cattleco agrees, from and after the
Closing Date, to indemnify and hold harmless each of the other
Holdco Indemnified Parties (other than Cattle Holdco) from all
Holdco Indemnified Costs which any of the other Holdco
Indemnified Parties (other than Cattle Holdco) may sustain, or
to which any of the other Holdco Indemnified Parties may be
subjected, relating to or arising directly or indirectly out
of any third-party action (as defined in Section 12.4.1) that
has been asserted against a Holdco Indemnified Party (other
than Cattle Holdco) that results from the operation of the
Feed Lot Business or the ownership or use of any of the assets
or property used or held for use by the Feed Lot Business
whether relating or arising prior to, at or after the Closing,
other than those arising under the terms of the Cattle Supply
Agreement.
12.3. INDEMNIFICATION OF THE CONAGRA INDEMNIFIED PARTIES. Holdco
agrees from and after the Closing Date to indemnify and hold
harmless ConAgra and each Subsidiary thereof and each of their
respective officers, directors and employees, (collectively,
the "ConAgra Indemnified Parties" and collectively with the
Holdco Indemnified Parties, the "Indemnified Parties") from
and against any and all damages, losses, claims, Liabilities,
demands, charges, suits, proceedings, penalties, costs and
expenses (including court costs and reasonable attorneys' fees
and expenses incurred in investigating and preparing for any
litigation or proceeding) (collectively, the "ConAgra
Indemnified Costs" and collectively with Holdco Indemnified
Costs, the "Indemnified Costs") which any of the ConAgra
Indemnified Parties may sustain, or to which any of the
ConAgra Indemnified Parties may be subjected, relating to or
arising directly or indirectly out of (w) any breach or
nonfulfillment or nonperformance by Holdco, the other
Acquiring Companies or the Acquired Companies of any covenant
or obligation of Holdco, the other Acquiring Companies or the
Acquired Companies in this Agreement that is to be performed
on or after the Closing, (x) any third-party action (as
defined in Section 12.4.1) relating to or arising out of the
failure by Holdco or the Acquired Companies to pay, perform or
discharge any of the Liabilities of the Acquired Companies
arising prior to, at or after the Closing, in each case,
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other than those (a) for which ConAgra has agreed to indemnify
the Holdco Indemnified Parties pursuant to this Agreement
including, without limitation, Pre-Closing Cattlemen
Litigation or (b) that are not primarily related to the
conduct of the Businesses, (y) the Leuking Litigation or any
future litigation filed against ConAgra or any Acquiring
Company or Acquired Company after the date of this Agreement
that is based primarily on the substantive facts alleged in
the Leuking Litigation and, in either case, to the extent that
such arises out of activities of the Acquiring Companies after
the Closing Date (the "Post-Closing Cattlemen Litigation" and
collectively with the Pre-Closing Cattlemen Litigation, the
"Cattlemen Litigation") or (z) except as provided in Sections
12.1.2 and 12.4.3(c), any ConAgra Indemnified Cost arising
from the Pre-Closing Cattlemen Litigation or any settlement
thereof to the extent that a ConAgra Indemnified Party is
liable therefore. In no event shall the indemnification
provided for in this Section 12.3 include any ConAgra
Indemnified Costs that a ConAgra Indemnified Party may suffer
or sustain as a result of (1) any loss in the value of any
debt or equity security (including, without limitation, the
common stock of Holdco, the Cattleco Note, the Promissory Note
or the Cattleco Revolver) of an Acquiring Company or Acquired
Company that may be now or hereafter owned by a ConAgra
Indemnified Party or (2) the impairment of the ability of an
Acquiring Company or Acquired Company to perform under any
such debt or equity security or any other contractual
obligation existing between a ConAgra Indemnified Party and an
Acquiring Company or Acquired Company.
12.4. DEFENSE OF THIRD-PARTY CLAIMS.
12.4.1. NOTICE OF THIRD-PARTY CLAIMS. An Indemnified Party shall
give prompt written notice to any Person who is obligated
to provide indemnification hereunder (an "Indemnifying
Party") of the commencement or assertion of any action,
proceeding, demand or claim by a third-party
(collectively, a "third-party action") in respect of which
such Indemnified Party shall seek indemnification
hereunder; provided that for purposes of this Section
12.4, the Indemnified Party in respect of an
indemnification by Cattleco under Section 12.2 shall be
deemed to exclude Cattleco. Any failure so to notify an
Indemnifying Party shall not relieve such Indemnifying
Party from any Liability that it may have to such
Indemnified Party under this Article 12 unless and to the
extent such failure to give notice materially and
adversely prejudices such Indemnifying Party.
12.4.2. NON-CATTLEMEN LITIGATION. Except in the case of Cattlemen
Litigation, the Indemnifying Party shall have the right to
assume control of the defense of, settle or otherwise
dispose of such third-party action on such terms as it
deems appropriate; provided, however, that:
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(a) The Indemnified Party shall be entitled, at its own
expense, to participate in the defense of such
third-party action (provided, that the Indemnifying
Party shall pay the attorneys' fees of the
Indemnified Party if (i) the employment of separate
counsel shall have been authorized in writing by
any such Indemnifying Party in connection with the
defense of such third-party action, (ii) the
Indemnifying Party shall not have employed counsel
reasonably satisfactory to the Indemnified Party to
have charge of such third-party action, or (iii)
the Indemnified Party's counsel shall have advised
the Indemnified Party in writing, with a copy to
the Indemnifying Party, that there is a conflict of
interest that could make it inappropriate under
applicable standards of professional conduct to
have common counsel).
(b) The Indemnifying Party shall obtain the prior
written approval of the Indemnified Party, which
approval shall not be unreasonably withheld, before
entering into or making any settlement, compromise,
admission or acknowledgment of the validity of such
third-party action or any Liability in respect
thereof if, pursuant to or as a result of such
settlement, compromise, admission, or
acknowledgment, injunctive or other equitable
relief would be imposed against the Indemnified
Party.
(c) No Indemnifying Party shall consent to the entry of
any judgment or enter into any settlement that does
not include as an unconditional term thereof the
giving by each claimant or plaintiff to each
Indemnified Party of a release from all Liability
in respect of such third-party action.
(d) The Indemnifying Party shall not be entitled to
control (but shall be entitled to participate at
its own expense in the defense of), and the
Indemnified Party shall be entitled to have sole
control over, the defense or settlement,
compromise, admission, or acknowledgment of any
third-party action (i) as to which the Indemnifying
Party fails to assume the defense within ten (10)
business days after notice of a claim for
indemnification or (ii) to the extent the
third-party action seeks an order, injunction or
other equitable relief against the Indemnified
Party which, if successful, would materially
adversely affect the business, operations, assets
or financial condition of the Indemnified Party;
provided, that the Indemnified Party shall make no
settlement, compromise, admission or acknowledgment
that would give rise to Liability on the part of
any Indemnifying Party without the prior written
consent of such Indemnifying Party.
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(e) The parties hereto shall extend reasonable
cooperation in connection with the defense of any
third-party action pursuant to this Article 12 and,
in connection therewith, shall furnish such
records, information and testimony and attend such
conferences, discovery proceedings, hearings,
trials and appeals as may be reasonably requested.
(f) To the extent an Indemnified Holdco Cost is
exclusively incurred or suffered by Cattleco or
Cattle Holdco that claim shall be made by Cattleco
or Cattle Holdco and any payment in respect thereof
shall be received by Cattleco or Cattle Holdco.
12.4.3. CATTLEMEN LITIGATION. In the case of Cattlemen Litigation,
the following provisions shall be applicable:
(a) ConAgra shall be entitled, through its designated
counsel, to control the defense of any Cattlemen
Litigation, including any settlement or compromise
thereof; provided, that ConAgra shall obtain the
prior written approval of Holdco, which approval
shall not be unreasonably withheld, before entering
into or making any settlement or compromise of any
Cattlemen Litigation or any judicial admission or
judicial acknowledgement of the validity of any
claim asserted in any Cattlemen Litigation.
(b) The Holdco Indemnified Parties shall be entitled,
through counsel that shall appear jointly with
counsel designated by ConAgra pursuant to clause
(a) above, to participate in the defense of any
Cattlemen Litigation. The parties hereto shall
extend reasonable cooperation in connection with
the defense of any Cattlemen Litigation pursuant to
this Section 12.4.3 and, in connection therewith,
shall furnish such records, information and
testimony and attend such conferences, discovery
proceedings, hearings, trials and appeals as may be
reasonably requested.
(c) Notwithstanding any other provision to the contrary
contained herein, (i) ConAgra and Holdco shall each
be responsible for its own attorneys' fees and
expenses incurred under this Section 12.4.3 in
connection with any Cattlemen Litigation and (ii)
ConAgra and Holdco shall each bear one-half (1/2)
of all court costs, witness and expert costs and
other similar out-of-pocket costs incurred in
connection with any Cattlemen Litigation.
12.5. LIMITATION ON ENVIRONMENTAL INDEMNIFICATION. With respect to
any claims for Holdco Indemnified Costs under Section
12.1.1(a), Holdco shall have exclusive control over the
selection and performance of any
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remediation method or goal or other corrective action
implemented at or otherwise affecting the subject property.
ConAgra shall have the right, but not the obligation, (i) to
participate in any meetings between the Holdco Indemnified
Parties and Governmental Authorities; (ii) to receive copies
of any remediation or corrective action proposals before such
proposals are submitted to Governmental Authorities; and (iii)
to provide comments to such proposals for consideration by
Holdco. ConAgra shall have twenty (20) business days following
receipt to provide comments to Holdco concerning any
remediation or corrective action proposals, unless Holdco
believes that fewer than twenty (20) business days are
available for review because of pending or threatened
enforcement action, claims by third parties, or applicable
governmental or other deadlines, in which case Holdco will
notify ConAgra and the parties will make reasonable
arrangements to achieve an expedited review. Holdco shall
consider all comments by ConAgra before making a final
determination concerning proposed work, but Holdco shall have
no obligation to adopt any suggestions by ConAgra.
Notwithstanding the exclusive control by Holdco over the
selection and performance of any remediation method or goal or
other corrective action pursuant to this section, ConAgra
shall have no obligation under Section 12.1.1(a) to indemnify
the Holdco Indemnified Parties for any cost in excess of the
lowest available cost reasonably necessary to achieve the
minimum legal requirements to resolve or correct the indemnity
claim while maintaining but not unreasonably interfering with
the historical use of the subject property. Holdco shall
provide to ConAgra reasonable access to all information,
documentation, employees, consultants and properties relating
to any claim under Section 12.1.1(a)
12.6. DIRECT CLAIMS. In any case in which an Indemnified Party seeks
indemnification hereunder which is not subject to Section 12.4
because no third-party action is involved, the Indemnified
Party shall promptly notify the Indemnifying Party in writing
of any Indemnified Costs which such Indemnified Party claims
are subject to indemnification under the terms hereof. The
failure of the Indemnified Party to exercise promptness in
such notification shall not amount to a waiver of such claim
unless, and to the extent, the resulting delay prejudices the
position of the Indemnifying Party with respect to such claim.
12.7. LIMITATION ON INDEMNIFICATION.
12.7.1. Except as otherwise provided in this Agreement, the
covenants, representations and warranties contained in
this Agreement and in all certificates and documents
delivered pursuant to or contemplated by this Agreement
shall survive the Closing and shall continue for the
applicable limitations period notwithstanding such Closing
or any investigation made by or on behalf of the party
entitled to the benefit thereof or any knowledge of such
party; provided, however, that
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(i) The representations and warranties contained in
Section 7.9 (Taxes) (other than Sections 7.9.1(vi),
7.9.1(viii) and 7.9.1(ix)(b)), Section 7.16 (Labor)
and Section 7.18 (Environmental) shall not survive
the Closing;
(ii) ConAgra shall not be responsible for any Holdco
Indemnified Costs pursuant to Section 12.1.1(e)
suffered by a Holdco Indemnified Party arising out
of a breach of any representations or warranties of
ConAgra contained in Section 7 unless a claim
therefore is asserted in writing within the
following periods of time: (A) the representations
and warranties contained in Section 7.1
(Organization), Section 7.2 (Articles and By-Laws),
Section 7.3 (Corporate Authorization), subpart (i)
of Section 7.4 (Effect of the Agreement), Section
7.6 (Capitalization), Section 7.9.1(vi), Section
7.9.1(viii) and Section 7.9.1(ix)(b) (Taxes) and
Section 7.17.1(iv) (ERISA) shall survive the
Closing Date until the tenth day after the
expiration of all applicable statutes of limitation
with respect to such representations and warranties
(after taking into account all extensions and
suspensions thereof); (B) the representations and
warranties contained in Section 7.17 (other than
Section 7.17.1(iv)) (ERISA) shall survive the
Closing Date for five (5) years following the
Closing Date; and (C) all other representations and
warranties shall survive for twelve (12) months
following the Closing Date;
(iii) ConAgra shall not be responsible for any Holdco
Indemnified Costs pursuant to Sections 12.1.1(a),
(b) and (e) or Non-Income Taxes indemnifiable
pursuant to Section 13.5.1 suffered by a Holdco
Indemnified Party unless the aggregate of all
Holdco Indemnified Costs and such Non-Income Taxes
suffered by the Holdco Indemnified Parties exceed,
on a cumulative basis, an amount equal to Seven
Million Five Hundred Thousand United States Dollars
($7,500,000);
(iv) the aggregate Liability of ConAgra hereunder,
pursuant to Sections 12.1.1(a), (b) and (e) for
Holdco Indemnified Costs and Section 13.5.1 for
indemnifiable Non-Income Taxes suffered by a Holdco
Indemnified Party shall in no event exceed Xxx
Xxxxxxx Xxxxx Xxxxxxx Xxxxxx Xxxxxx Dollars
($150,000,000); and
(v) ConAgra shall not be responsible for any Holdco
Indemnified Costs pursuant to Sections 12.1.1(a),
(b), (c), (e), (f) and (h) to the extent that such
Holdco Indemnified Costs are reflected as a reserve
or expense accrual in (i) the Final Processing
Closing Balance Sheet (and are taken into account
in calculating the
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Aggregate Consideration) if such Holdco Indemnified Costs
are asserted on behalf of any Acquiring Company (other
than Cattle Holdco) or any Processing Company or (ii) the
Final Cattleco Closing Balance Sheet (and are taken into
account in determining the Cattleco Stockholder Net
Investment) if such Holdco Indemnified Costs are asserted
on behalf of Cattle Holdco or Cattleco.
12.7.2. OFFSETS - REPRESENTATION AND WARRANTY INDEMNIFICATION. The
amount of any Holdco Indemnified Costs for which
indemnification is provided under Sections 12.1.1(a), (b),
(e) and (f) shall be subject to a net offset equal to the
sum of (i) the amount of cash proceeds actually received
by any Acquiring Company or Acquired Company from the sale
or other divestiture, or use, of any of the assets
described on Exhibit 12.7.2 (the "Garden City Assets"),
after deducting from the amount of such cash proceeds (A)
all out-of-pocket costs, expenses and Taxes incurred by
any Acquiring Company or Acquired Company as a direct
result of the collection and realization of such cash
proceeds, and (B) the book value of the Garden City Assets
set forth on the Final Processing Closing Balance Sheet
and after increasing such offset by all reductions in
Taxes actually realized by Holdco or any Acquiring Company
or Acquired Company from the sale or other divestiture of
the Garden City Assets (collectively, the "Garden City
Value"), plus (ii) the amount of any Garden City Insurance
Capital Contribution previously made to Holdco or any
Acquired Company or Acquiring Company. In the event
Holdco, any Acquiring Company or any Acquired Company
receives Garden City Value or any Garden City Insurance
Capital Contributions subsequent to receipt of any payment
from ConAgra for Holdco Indemnified Costs as described
above, then Holdco shall pay to ConAgra the amount of
Garden City Value and Garden City Insurance Capital
Contributions received to the extent of such prior
indemnity payment(s) paid by ConAgra.
12.7.3. [Intentionally Omitted]
12.7.4. SURVIVAL. ConAgra shall not be responsible for any Holdco
Indemnified Costs pursuant to Section 12.1.1(a) or
12.1.1(b) unless a claim with respect thereto is asserted
in writing within five (5) years following the Closing
Date.
12.7.5. OFFSETS - SECTIONS 12.1.1(c) AND (d) INDEMNIFICATION. The
amount of Holdco Indemnified Costs for which
indemnification is provided under Section 12.1.1(c) or
Section 12.1.1(d) shall be subject to a net offset equal
to (a) the amount of cash proceeds received under the
indemnification provided under Section 12.2 after
deducting therefrom all out-of-pocket costs, expenses and
Taxes incurred by any Acquiring Company or Acquired
Company (other than Cattle Holdco and
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Cattleco) in connection with the collection and
realization of such cash proceeds and after increasing
such offset for all reductions in Taxes realized from the
collection and realization of such cash proceeds and (b)
the amount (the "Profit Amount") by which (x) the
aggregate cash proceeds received by any Acquiring Company
or Acquired Company (other than Cattle Holdco and
Cattleco) from the Divestiture of the Feed Lot Business
(after deducting therefrom all out-of-pocket costs,
expenses and Taxes incurred by any Acquiring Company or
Acquired Company in connection with the Divestiture of the
Feed Lot Business and the repayment of all obligations
outstanding under the Cattleco Loan Agreement, the
Cattleco Note and all other indebtedness incurred by the
Feed Lot Business and also after increasing such offset
for all reductions in Taxes realized from the Divestiture
of Feed Lot Business) exceeds (y) Eighteen Million United
States Dollars ($18,000,000); provided, however, in the
event that the HMC Call Option (as such term is defined in
the Stockholders Agreement) has been previously exercised
as contemplated in the Stockholders Agreement then, to the
extent that all or any portion of the Profit Amount has
been taken into account in calculating the Option Purchase
Price (as such term is defined in the Stockholders
Agreement) payable in connection with such exercise, such
portion of the Profit Amount shall not be available for
use as an offset under clause (b) above.
12.7.6. CALCULATION OF INDEMNITY PAYMENTS. The amount of any
Holdco Indemnified Costs and ConAgra Indemnified Costs for
which indemnification is provided under this Article 12
shall be net of any amounts recovered by the applicable
Indemnified Party from any contribution or counterclaims
or under any insurance policies (in each case, after
deducting therefrom all out-of-pocket costs, expenses and
Taxes incurred in connection with the collection and
realization of such amounts) with respect to such Holdco
Indemnified Costs or ConAgra Indemnified Costs, as
applicable, and shall be increased to take account of any
net Income Tax cost actually incurred by the applicable
Indemnified Party arising from the receipt of indemnity
payments hereunder attributable to fines and penalties
incurred by Holdco or its Affiliates that are not
deductible for Income Tax purposes (grossed up for Income
Taxes imposed on such increase). In computing the amount
of any such Tax cost, the applicable Indemnified Party
shall be deemed to recognize all other items of income,
gain, loss, deduction or credit before recognizing any
item arising from the receipt of any indemnity payment
hereunder or the incurrence or payment of any indemnified
amount. The applicable Indemnified Party agrees to use
reasonable best efforts to pursue and collect on any
recovery available to it and to net any such recovery
against any claim for indemnification hereunder or, if an
indemnification claim has already been resolved, against
the amount
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paid by the Indemnifying Party pursuant to such
resolution. After it has been determined that there has
been a breach of a representation or warranty, the amount
of Holdco Indemnified Costs recoverable under Section
12.1.1(e) shall be determined without regard to any
materiality qualification contained therein or to whether
or not any such breach results or may result in a Company
Material Adverse Effect.
12.7.7. TAX TREATMENT OF INDEMNIFICATION. For all Tax purposes,
the parties agree to treat (and shall cause each of their
respective Affiliates to treat) any indemnity payment
under this Agreement (including, without limitation, any
payments by any party hereto, or its designee, to another
party hereto, or its designee, under Article 13 hereof,
whether or not by way of indemnity or otherwise) as an
adjustment to the purchase price unless a final and
unappealable determination by an appropriate Governmental
Authority (which shall include the execution of an IRS
Form 870-AD or successor form) provides otherwise;
provided that the Indemnifying Party's prior written
consent (which will not be unreasonably withheld,
conditioned or delayed) will be obtained by the
Indemnified Party who seeks to accept, via a settlement or
compromise with any such Governmental Authority, a
position that is contrary to treatment of an indemnity
payment (or such other payment) as an adjustment to the
purchase price. 12.8. GENERAL LIABILITY CASUALTY POLICY,
PRODUCT LIABILITY AND AUTOMOBILE CLAIM INDEMNIFICATION.
ConAgra agrees to (i) be responsible for and pay, or cause
its applicable plans, policies (or similar arrangements)
or carriers to be responsible for and pay (subject to the
terms of the applicable plan, policy or arrangement) and
(ii) from and after the Closing Date, indemnify and hold
harmless each of the Holdco Indemnified Parties from and
against all Holdco Indemnified Costs which any Holdco
Indemnified Party may sustain, or to which any Holdco
Indemnified Party may be subjected, relating to or arising
directly or indirectly out of the occurrence on or prior
to the Closing Date (whether known or unknown as of the
Closing Date) of an event that would have been covered
under ConAgra's general liability casualty policy, product
liability or automobile self-insurance program, including,
without limitation, any item that would otherwise be
subject to ConAgra's self-insurance program and whether or
not such Holdco Indemnified Costs are in excess of any
self-insurance amounts.
12.9. DEED OF CROSS GUARANTEE INDEMNITY.
12.9.1. CONAGRA INDEMNITY. ConAgra agrees, from and after the
Closing Date, to indemnify and hold harmless each of the
Holdco Indemnified Parties from and against all Holdco
Indemnified Costs which any Holdco Indemnified Party may
sustain, or to which any Holdco
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Indemnified Party may be subjected, as a result of any
Debt (as defined in the Deed of Cross Guarantee) incurred
by ConAgra Trade Group Pty. Ltd.
12.9.2. HOLDCO INDEMNITY. Holdco agrees, from and after the
Closing Date, to indemnify and hold harmless each of the
ConAgra Indemnified Parties from and against all ConAgra
Indemnified Costs which any ConAgra Indemnified Party may
sustain, or to which any ConAgra Indemnified Party may be
subjected, as a result of any Debt (as defined in the Deed
of Cross Guarantee) incurred by Australia Operating
Company and/or Xxxxxxx Pty. Limited.
12.10. REMEDIES. After the Closing the provisions of this Agreement
shall be the exclusive basis for the assertion of claims
against, or the imposition of Liability on, any party by
another party hereto in respect of any breach of this
Agreement.
12.11. NO CONTRIBUTION. After the Closing, except as provided in
Section 12.2, no Acquiring Company or Acquired Company shall
be liable for any Holdco Indemnified Costs sustained by any
Holdco Indemnified Party; accordingly, ConAgra shall not be
entitled to seek contribution or any other payments from an
Acquiring Company or Acquired Company for any Holdco
Indemnified Costs that ConAgra is obligated to pay pursuant to
this Agreement.
12.12. ASSIGNMENT. The rights and obligations of Holdco and the
Holdco Indemnified Parties under this Article 12 shall not be
assignable in all or in part; provided, however, that to the
extent requested by a lender under the Senior Bank Commitment
Letter, the parties shall execute and deliver such documents
as may be necessary to effect a collateral assignment of the
rights arising under this Agreement to the lenders under the
Senior Bank Commitment Letter.
12.13. MITIGATION. ConAgra, Holdco, the Acquiring Companies and the
Acquired Companies will use commercially reasonable efforts to
mitigate the Indemnified Costs.
12.14. LIMITATION OF DAMAGES. ConAgra, Cattleco, and Holdco shall be
responsible only for direct damages, and in no event shall
ConAgra, Cattleco, or Holdco be liable for punitive or
exemplary, indirect, special consequential or similar damages.
12.15. OTHER INDEMNITIES. The indemnification obligations set forth
in Article 6 and Article 13 are in addition to the
indemnification obligations set forth in this Article 12 and,
unless expressly stated otherwise in Article 6, this Article
12 or Article 13, the indemnification obligations in Article 6
and Article 13 are not subject to the overall limitations,
minimum amounts,
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time limitations, limitations on recourse and other
limitations set forth in this Article 12.
12.16. EXCLUSIVE INDEMNIFICATION. The indemnification obligation set
forth in Section 12.1.2 shall be the exclusive indemnification
obligations of ConAgra in respect of Pre-Closing Cattlemen
Litigation and the provisions of Section 12.1.1 shall not be
applicable to Pre-Closing Cattlemen Litigation.
13. TAX MATTERS.
13.1. TRANSFER TAXES. Holdco shall be responsible for and shall pay
all Non-Income Taxes imposed on or in connection with the sale
or transfer of securities hereunder, the sale or transfer of
assets to the Acquiring Companies or Acquired Companies and
any other transactions effected pursuant to this Agreement
(other than the transactions described in Section 2.1.5) and
shall indemnify and hold harmless the ConAgra Indemnified
Parties from such Non-Income Taxes. ConAgra shall be
responsible for and shall pay all Non-Income Taxes imposed on
or in connection with the transactions described in Section
2.1.5 and shall indemnify and hold harmless the Holdco
Indemnified Parties from such Non-Income Taxes.
13.2. TAX SHARING AGREEMENTS. Any tax sharing or other allocation
agreement with respect to Taxes to which any Acquiring Company
or Acquired Company is a party with ConAgra or any other
Affiliate thereof is hereby terminated as of the Closing Date
and shall have no further effect for any taxable period. This
Article 13 and Section 7.9 above shall control all of the
parties' respective obligations for Taxes affecting the
Acquiring Companies and Acquired Companies and supersede any
and all prior agreements, contracts or understandings between
ConAgra or its Affiliates and any Acquiring Company or
Acquired Company regarding any Acquiring Company or Acquired
Company's Taxes.
13.3. TAX RETURNS.
13.3.1. TAX RETURNS. After the Closing, Holdco shall cause each of
the Acquired Companies to consent to join, for all Tax
periods of the Acquired Companies ending on or before the
Closing Date for which the Acquired Companies are eligible
to do so, in any consolidated or combined federal, state
or local Tax returns of ConAgra. ConAgra shall cause to be
prepared and timely filed any and all consolidated or
combined federal, state or local Tax returns as well as
any separate federal, state, local or foreign Tax returns
for the Acquired Companies for all Tax periods ending on
or before the Closing Date and shall be responsible for
the timely payment of all Taxes shown due except (i) if
such Taxes are a liability of any Processing Company, to
the extent
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accrued as a Liability on the Final Processing Closing
Balance Sheet (and taken into account in calculating the
Aggregate Consideration) or (ii) if such Taxes are a
Liability of Cattleco, to the extent accrued as a
Liability on the Final Cattleco Closing Balance Sheet (and
taken into account in determining the Cattleco Stockholder
Net Investment), as the case may be. Holdco shall prepare
or cause to be prepared and timely filed any and all Tax
returns of (i) the Acquiring Companies for all Tax Periods
and (ii) the Acquired Companies for Tax periods beginning
after the Closing Date. Holdco shall provide ConAgra
informational drafts of the Income Tax Returns for the
Acquiring Companies that include the Closing Date or any
portion of the Pre-Closing Period at least thirty (30)
days before any such return's due date for filing with the
appropriate Governmental Authority. The parties agree that
for federal (and applicable state) Income Tax purposes the
transactions described in Sections 2.2.3 through 2.2.8 of
this Agreement will be treated as occurring at the
beginning of the day following the Closing Date as
provided in Treas. Reg. Section 1.1502-76(b)(2)(ii)(B) and
analogous state law. Holdco agrees that it and its
Affiliates shall report, and take all actions consistent
with the Tax reporting of, the Acquiring Companies as
never having been members of ConAgra's Group for any Tax
purposes (or any unitary, combined or consolidated group
of ConAgra), provided that ConAgra and its Subsidiaries
shall be in compliance with their obligations under
Section 9.1.1(n). The parties agree to cooperate with each
other and each other's Affiliates in the preparation of
Tax returns pertaining to the Acquiring Companies and the
Acquired Companies. The parties shall be entitled to
utilize the services of the other party's personnel who
would have been responsible for preparing such returns as
they relate to the Acquiring Companies and the Acquired
Companies, without charge to the extent reasonably
necessary in preparing said returns on a timely basis. The
parties shall also provide each other with full access to
applicable and reasonably relevant records to enable the
timely preparation and filing of said returns. ConAgra
shall pay on a timely basis all Taxes in respect to the
Pre-Closing Period shown as due on the returns it is
responsible to prepare under this Section 13.3.1 except
(i) if such Taxes are a Liability of any Processing
Company, to the extent accrued as a Liability on the Final
Processing Closing Balance Sheet (and taken into account
in calculating the Aggregate Consideration) or (ii) if
such Taxes are a Liability of Cattleco, to the extent
accrued as a Liability on the Final Cattleco Closing
Balance Sheet (and taken into account in determining the
Cattleco Stockholder Net Investment), as the case may be.
Holdco shall pay or cause to be paid on a timely basis all
Taxes shown as due on the returns it is responsible to
prepare under this Section 13.3.1. The parties shall make
available to each other without charge, copies of the
portions of such returns relating to the Acquiring
Companies and the Acquired
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Companies for Taxable years ending before or including the
Closing Date. The parties' obligations to pay Taxes under
this Section 13.3.1 shall not affect their rights to
indemnification for Taxes under other provisions of this
Article 13; it is the intention of the parties hereto that
in no event shall a party pay more than once under
different provisions of this Agreement for the same Tax
Liability.
13.3.2. ALLOCATIONS. ConAgra shall include the income and
deductions of the Acquired Companies (including any
deferred income triggered into income by Treas. Reg.
Section 1.1502-13 and Treas. Reg. Section 1.1502-19, or
equivalent provisions of state or local law) on ConAgra's
consolidated or combined federal, state or local Income
Tax returns for the Pre-Closing Period and shall pay any
Income Taxes attributable thereto. In any case where any
Tax return covers a Tax period beginning before and ending
after the Closing Date, the amount of Taxes allocable
between ConAgra on one hand, and the Acquired Companies on
the other hand, shall be determined by closing the books
of the Acquired Companies as of and including the Closing
Date. If the allocation of an item of income, gain, loss,
deduction or credit cannot be specifically allocated based
on such closing of the books, such item shall be allocated
on a daily basis.
13.3.3. STRADDLE PERIOD RETURNS OF THE ACQUIRED COMPANIES. For
purposes of this Section 13.3.3, "Straddle Period Return"
means a Tax return of the Acquiring Companies or Acquired
Companies that covers a Taxable year or period beginning
before and ending after the Closing Date. Not later than
thirty (30) days prior to the due date of a Straddle
Period Return, Holdco shall prepare and deliver a copy of
such Straddle Period Return return to ConAgra together
with (i) in the case of an Income Tax return, a statement
of the amount of Income Taxes shown due on such Straddle
Period Return that are attributable to Income Taxes
accrued on or before the Closing Date by the Acquiring
Companies (but, in the case of an Acquiring Company, only
such Income Taxes that are the direct result of a breach
by ConAgra or a Subsidiary thereof of Section 9.1.1(n) and
then only to the extent of the increase in Income Taxes
caused by such breach over the Income Taxes that would be
payable absent such breach) or Acquired Companies (a
"Pre-Closing Straddle Period Income Tax") and (ii) in the
case of a Non-Income Tax return, a statement of the
excess, if any, of (x) the amount of Non-Income Taxes
shown due on such Straddle Period Return that are
attributable to the Pre-Closing Period (but, in the case
of an Acquiring Company, only such Non-Income Taxes that
are the direct result of a breach by ConAgra or a
Subsidiary thereof of Section 9.1.1(n) and then only to
the extent of the increase in Non-Income Taxes caused by
such breach over the Taxes that would be payable absent
such breach) over (y) the amount set up as a Liability for
such Non-Income Taxes on the Final Processing Closing
Balance
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Sheet (and taken into account in calculating the Aggregate
Consideration) or the Final Cattleco Closing Balance Sheet
(and taken into account in determining the Cattleco
Stockholder Net Investment) (the sum of (x) minus (y) (a
"Pre-Closing Straddle Period Non-Income Tax")) (or, in the
event that the amount described in (y) is greater than the
amount described in (x) (such amount, an "Excess
Non-Income Tax Accrual"), a statement of such Excess
Non-Income Tax Accrual amount). Not later than five (5)
days prior to the due date of such Straddle Period Return,
(i) ConAgra shall pay or cause to be paid to Holdco the
amount attributable to a Processing Company of any
Pre-Closing Straddle Period Income Tax and any Pre-Closing
Straddle Period Non-Income Tax, and (ii) ConAgra shall pay
or cause to be paid to Cattleco the amount attributable to
Cattleco of any Pre-Closing Straddle Period Income Tax and
any Pre-Closing Straddle Period Non-Income Tax. In the
event of an Excess Non-Income Tax Accrual, (a) Holdco
shall pay to ConAgra or its designee the amount of such
Excess Non-Income Tax Accrual that is attributable to a
Processing Company and (b) Cattleco shall pay to ConAgra
or its designee the amount of such Excess Non-Income Tax
Accrual that is attributable to Cattleco. Any payment
obligations under this Section 13.3.3 shall not be subject
to the limitations of Section 12.7.1(iii) or Section
12.7.1(iv).
13.4. SECTION 338(g) ELECTION. Holdco shall not make nor allow any
of its Affiliates to make an election under Code Section
338(g) with respect to the acquisition of Australia Operating
Company without the prior written consent of ConAgra.
13.5. TAX INDEMNITY.
13.5.1. TAX INDEMNITY. Subject to Section 13.11 and except to the
extent of (x) a Non-Income Tax attributable to a
Processing Company that is a Non-Income Tax accrued as a
Liability on the Final Processing Closing Balance Sheet
(and taken into account in calculating the Aggregate
Consideration) or (y) a Non-Income Tax attributable to
Cattleco that is a Non-Income Tax accrued as a Liability
on the Final Cattleco Closing Balance Sheet (and taken
into account in determining the Cattleco Stockholder Net
Investment), from and after the Closing Date, ConAgra
shall be solely liable for, shall pay and shall protect,
defend, indemnify and hold harmless the Holdco Indemnified
Parties from any and all Taxes (including, without
limitation, any obligation to contribute to the payment of
any Taxes determined on a consolidated, combined or
unitary basis with respect to a group of corporations that
includes or included any of the Acquiring Companies or
Acquired Companies), and any costs, expenses, losses or
damages, including reasonable expenses of investigation
and reasonable attorneys' and accountants' fees and
expenses, directly arising out of the protest,
determination, assessment or collection of such Taxes
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(collectively, "Tax Losses") which result from (i) any
Liability for Taxes imposed on any of the Acquiring
Companies (but, in the case of an Acquiring Company, only
if ConAgra or its Subsidiaries breached Section 9.1.1(n)
and then only to the extent of the increase in Taxes
caused by such breach over the Taxes that would be payable
absent such breach or an Income Tax Liability under clause
(iii) in this Section below) or Acquired Companies for any
taxable period or portion thereof ending on or prior to
the Closing Date, including any Acquired Company ceasing
to be a member of the ConAgra Group, (ii) the Liability of
ConAgra, any member of the ConAgra Group or any Affiliate
of ConAgra (other than an Acquiring Company or Acquired
Company) for any Taxes for any taxable period or (iii) the
Liability of any of the Acquiring Companies or Acquired
Companies pursuant to Treas. Reg. Section 1.1502-6 or any
analogous state, local or foreign law or regulation or by
reason of its having been a member of any consolidated,
combined or unitary group on or prior to the Closing Date.
13.5.2. CERTAIN DEFINITION. "Adjustment" means any change in an
item of income, gain, loss, deduction or credit,
including, but not limited to, changes attributable to any
amended Income Tax returns, deficiencies asserted by any
Taxing authority, overpayments, claims for refund, audit,
examination, proceedings or litigation resulting from any
of the foregoing events.
13.5.3. TIMING ADJUSTMENTS: Holdco's Income Tax Decrease. If there
is an Adjustment to any item reported on an Income Tax
return filed with respect to ConAgra or any of its
Affiliates (including any Acquiring Company or Acquired
Company) for a Pre-Closing Period that results in an
increase in the Income Tax liabilities of ConAgra or any
of its Affiliates (including any Acquiring Company or
Acquired Company to the extent ConAgra is liable for such
Income Tax liabilities under this Agreement) and such
Adjustment results in a corresponding Adjustment to items
reported on an Income Tax return filed by or with respect
to Holdco, any Acquiring Company, any Acquired Company or
any Affiliate for a period (or a portion of a period)
occurring after the Closing Date, with the result that the
Income Tax liabilities of Holdco, any Acquiring Company,
any Acquired Company, or such Affiliate with respect to
any such period are reduced, then Holdco shall pay to
ConAgra an amount equal to such increase in Income Taxes
of ConAgra or its Affiliates, such payment being limited
to the decrease in the Income Tax liabilities of Holdco
and its Affiliates.
13.5.4. TIMING ADJUSTMENTS: Holdco's Income Tax Increase. If there
is an Adjustment to any item reported on an Income Tax
return filed with respect to ConAgra or any of its
Affiliates (including any Acquiring Company or any
Acquired Company) for a Pre-Closing Period that
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results in a decrease in the Income Tax liabilities of
ConAgra or any of its Affiliates (including any Acquiring
Company or any Acquired Company to the extent ConAgra is
liable for such Income Tax liabilities under this
Agreement) and such Adjustment results in a corresponding
Adjustment to items reported on an Income Tax Return filed
by or with respect to Holdco, any Acquiring Company or any
Acquired Company or any Affiliate for a period (or portion
of a period) occurring after the Closing Date, with the
result that the Income Tax liabilities of Holdco, any
Acquiring Company or Acquired Company, or any such
Affiliate with respect to such period are increased, then
ConAgra shall pay to Holdco an amount equal to such
increase in Income Taxes of Holdco or Holdco's Affiliate,
such payment being limited to the decrease in the Income
Tax liabilities of ConAgra and its Affiliates.
13.5.5. PAYMENTS. Any payment by a party under Section 13.5.3 or
Section 13.5.4 shall be due within thirty (30) days after
the realization of the applicable Income Tax decrease. Any
such payment shall bear interest computed at the
underpayment rate and in the manner provided by Section
6621(a)(2) of the Code for a period commencing on the
thirtieth day after the actual realization of the
applicable Income Tax decrease, and shall bear such
interest until paid by the reimbursing party.
13.6. REFUNDS. Any Taxes of the Acquiring Companies, the Acquired
Companies or their Subsidiaries that are paid in respect of a
Pre-Closing Period and that are refunded to Holdco or any of
its Affiliates shall be paid to ConAgra or its designee,
except as otherwise provided in this Section 13.6. The term
"refunds," "refunded" or derivatives of such terms generally
shall include, but are not limited to, refunds of Taxes,
overpayments of Taxes, and reductions in Taxes or estimated
Taxes (whether by way of credit, reduction, offset or
otherwise). Holdco shall or shall cause its Affiliates to pay
to ConAgra or its designee any such refunds within ten (10)
days of the receipt thereof and shall pay to ConAgra, or its
designee, the amount of any refunds utilized (i) as a deposit
for or payment of estimated Taxes of any Acquiring Company,
Acquired Company or their Subsidiaries or (ii) to reduce the
liability for Taxes of any Acquiring Company, Acquired Company
or their Subsidiaries, whether by way of credit, reduction,
offset or otherwise for any taxable period (other than a
Pre-Closing Period with respect to uncollected Taxes not
accrued as a liability on the Final Processing Closing Balance
Sheet in the case of refunds attributable to any Processing
Company or on the Final Cattleco Closing Balance Sheet in the
case of refunds attributable to Cattleco) within ten (10) days
of the utilization thereof, except (a) in the case of refunds
of Taxes attributable to any Processing Company, to the extent
accrued as an asset on the Final Processing Closing Balance
Sheet (and taken into account in calculating
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the Aggregate Consideration), (b) in the case of refunds of
Taxes attributable to Cattleco, to the extent accrued as an
asset on the Final Cattleco Closing Balance Sheet (and taken
into account in determining the Cattleco Stockholder Net
Investment) or (c) in the case of refunds of Non-Income Tax
not covered by clause (a) or (b), any such refund payable to
ConAgra or its designee will be limited to the cumulative
amount of indemnity payments of Non-Income Taxes made by
ConAgra or its designee hereunder. If any portion of any
Non-Income Tax refund is retained by Holdco or any Subsidiary
thereof pursuant to clause (c) of the preceding sentence, such
portion shall increase the basket amount of Section
12.7.1(iii) on a cumulative basis. Notwithstanding the
foregoing, (x) any refunds of Taxes utilized or received by
Cattle Holdco or Cattleco attributable to the Pre-Closing
Period shall be paid by such recipient to ConAgra or its
designee within ten (10) days of the utilization or receipt
thereof and shall not increase the basket amount of Section
12.7.1(iii), and (y) any payment by Holdco or its Subsidiaries
to ConAgra or its designee pursuant to this Section 13.6 shall
be reduced to take into account any net Income Tax cost to
Holdco or its Subsidiaries on the receipt of such refund. Any
such refund payable to ConAgra or its designee shall bear
interest at the underpayment rate and in the manner provided
by Section 6621(a)(2) of the Code commencing on the tenth day
after the utilization or receipt of any such refund by Holdco
or any of its Affiliates until paid in full to ConAgra or its
designee.
13.7. COOPERATION. After the Closing Date, ConAgra and Holdco shall
make available to the other, free of charge, cost or expense
and as reasonably requested, all information, records or
documents reasonably relevant to the determination of Tax
Liabilities or potential Tax Liabilities of any Acquiring
Company or Acquired Company or predecessor thereof for all
periods prior to or including the Closing Date (or any matter,
transaction or event occurring on or before the Closing Date
that may affect such a Tax Liability) and each such Person
shall preserve all such available information, records and
documents until the expiration of any applicable statute of
limitations or extensions thereof. Each such Person shall
provide, free of charge, cost or expense, the other(s) and the
pertinent Governmental Authority with all available
information and documentation reasonably necessary to comply
with all Tax audit information requests or inquiries made of
any such periods relevant to such Tax Liabilities or potential
Tax Liabilities (or any matter, transaction or event occurring
on or before the Closing Date that reasonably may affect such
a Tax Liability). Any information obtained pursuant to this
Section 13.7 shall be held in strict confidence and shall be
used solely in connection with the reason for which it was
requested. In addition, Holdco shall make available to
ConAgra, free of charge, cost or expense, all returns, refund
claims, information, records or documents reasonably relevant
to the determination of refunds governed by Section 13.6
hereof (or any matter, transaction, or event that may affect
any such refund). Holdco shall and
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shall cause its Affiliates to preserve all such available
returns, refund claims, information, records or documents
until the expiration of any applicable statute of limitations
or extensions thereof. Holdco shall promptly notify ConAgra in
writing of the receipt or utilization of any such refund by
Holdco or any of its Affiliates. Such notice shall include a
statement including a reasonable description and estimate of
the anticipated refund, the type of Tax that is the subject of
such refund, the period(s) that such refund relates to, and
such other information as may be reasonably relevant to inform
ConAgra of the circumstances of any such refund.
13.8. TAX AUDITS.
13.8.1. NOTICE. Holdco shall promptly notify ConAgra in writing
upon receipt by Holdco or any Affiliate of Holdco, and
ConAgra shall promptly notify Holdco in writing upon
receipt by ConAgra or any Affiliate of ConAgra, of notice
of any pending or threatened federal, state, local or
foreign Tax audits, examinations or assessments of any
Acquiring Company or Acquired Company (other than
consolidated or combined Income Tax audits, examinations
or assessments), so long as Taxable years which include
the Pre-Closing Period remain open.
13.8.2. CERTAIN INCOME TAXES. ConAgra shall have the sole right
(a) to represent the Acquiring Companies and Acquired
Companies and their predecessors in any Income Tax audit
or administrative or court proceeding relating to Income
Taxes of ConAgra or any Acquiring Company or Acquired
Company attributable to the Pre-Closing Period that are
reported on Income Tax returns filed by ConAgra, (b) to
negotiate, compromise and settle any such audit or
proceeding and (c) to employ counsel of its choice at its
expense. Notwithstanding the foregoing, with respect to
Income Taxes, ConAgra shall not be entitled to settle,
either administratively or after the commencement of
litigation, any claim for such Income Taxes which would
adversely and directly affect the Liability for Income
Taxes of any Acquiring Company or any Acquired Company for
any period after the Closing Date to any extent
(including, but not limited to, the imposition of Income
Tax deficiencies, or the adjustment of any Tax attribute
such as the reduction of asset bases or cost adjustments,
the lengthening of any amortization or depreciation
periods, the denial of amortization or depreciation
deductions, or the reduction of loss or credit
carryforwards) without the prior written consent of
Holdco, which consent shall not be unreasonably withheld,
conditioned or delayed, provided that where consent to
settlement of an Income Tax claim is so withheld by
Holdco, ConAgra's indemnification Liability hereunder
shall not exceed the Liability that would have resulted
from ConAgra's proposed settlement of such Income Taxes.
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13.8.3. NON-INCOME TAXES. Provided that the basket amount of
Section 12.7.1(iii) has not been exhausted by Holdco
Indemnified Costs and Non-Income Taxes (on a cumulative
basis), Holdco shall have the sole right (a) to represent
Holdco, the Acquiring Companies and the Acquired Companies
in any Non-Income Tax audit or administrative or court
proceeding for Non-Income Taxes of any Acquiring Company
or Acquired Company attributable to the Pre-Closing
Period, (b) to negotiate, compromise and settle any such
audit or proceeding and (c) to employ counsel of its
choice at its expense. Otherwise, at ConAgra's election,
ConAgra shall have the sole right to (x) so represent such
companies in any such Non-Income Tax matter, (y)
negotiate, compromise and settle any such audit or
proceeding, and (z) employ counsel of its choice at its
expense. Notwithstanding the foregoing:
(i) With respect to audits or administrative or court
proceedings controlled by Holdco, Holdco shall not
be entitled to settle, either administratively or
after the commencement of litigation, any claim for
such Non-Income Taxes which would adversely and
directly affect the Liability for Non-Income Taxes
of ConAgra or its Affiliates to any extent
(including, but not limited to, the imposition of
Non-Income Tax deficiencies or the payment by
ConAgra of any portion of the Non-Income Taxes
proposed to be compromised or settled) without the
prior written consent of ConAgra, which consent
shall not be unreasonably withheld, conditioned or
delayed.
(ii) With respect to audits or administrative or court
proceedings controlled by ConAgra, ConAgra shall
not be entitled to settle, either administratively
or after the commencement of litigation, any claim
for such Non-Income Taxes which would adversely and
directly affect the liability for Non-Income Taxes
of Holdco or its Affiliates to any extent
(including, but not limited to, the imposition of
Non-Income Tax deficiencies or the payment by
Holdco of any portion of the Non-Income Taxes
proposed to be compromised or settled) without the
prior written consent of Holdco, which consent
shall not be unreasonably withheld, conditioned or
delayed.
13.9. HOLDCO INDEMNITIES. Holdco shall pay and shall protect,
defend, indemnify and hold ConAgra and ConAgra's Affiliates
harmless from and against any Liability resulting directly
from any breach or nonfulfillment of any agreement or covenant
under this Article 13 that is a direct result of actions taken
after the Closing Date by any Acquiring Company or Acquired
Company.
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13.10. SURVIVAL. The obligations of the parties under this Article 13
shall survive the Closing until the tenth day after expiration
of the applicable or underlying tax statute of limitations
(including any extensions).
13.11. MISCELLANEOUS. The provisions of this Article 13 shall be the
Holdco Indemnified Parties' sole and exclusive remedy in
respect of Tax claims except as specifically otherwise
provided in Article 12, and the provisions of Article 13 shall
not be subject to the provisions or limitations set forth in
Section 12.7 other than Section 12.7.1(iii), Section
12.7.1(iv), Section 12.7.7, Section 12.10, Section 12.12 and
Section 12.14. Notwithstanding the foregoing, the limitations
set forth in Section 12.7.1(iii) and Section 12.7.1(iv) shall
not apply to (a) a Non-Income Tax imposed on or in connection
with the transactions described in Section 2.1.5 for which
ConAgra is liable under Section 13.1, and (b) a Pre-Closing
Straddle Period Non-Income Tax payable under Section 13.3.3,
and (c) Income Taxes. Any payments of Taxes under this Article
13, or any payments of Holdco Indemnified Costs under Article
12, whether or not by way of indemnity or otherwise, each in
respect of Australia Operating Company or its Subsidiaries,
made by ConAgra or its designee, shall be made to Australia
Acquisition Co., and any refunds of Taxes under this Article
13, or any payments of ConAgra Indemnified Costs under Article
12, whether or not by way of indemnity or otherwise, each in
respect of Australia Operating Company or its Subsidiaries,
that are payable to ConAgra or its designee, shall be made by
Australia Acquisition Co.
14. ADDITIONAL AGREEMENTS.
14.1.1. DUMAS PLANT. The parties acknowledge that the City of
Cactus, Texas is in the process of evaluating possible
alternatives to improve its wastewater disposal facilities
to bring such facilities into compliance with applicable
Environmental Laws. The parties hereby agree that with
respect to any such wastewater disposal facility
improvements to be implemented by Cactus, Texas necessary
to cause such facility to be able to treat on an ongoing
basis, at those levels in effect at the time of this
Agreement, the influent waste water from the Xxxxx Plant
in compliance with applicable Environmental Laws as
described on Exhibit 14.1 (the "Cactus Project"):
(a) Holdco shall make, and shall cause the Acquiring
Companies and Acquired Companies to make, all
representations, agreements and commitments with
respect to (x) the continued ownership and
operation of the plant located in Dumas, Texas as
such is described on Exhibit 14.1.1(a) (the "Dumas
Plant"), (y) payment of fees for use of the
wastewater facility and (z) continued use of the
wastewater facility, consistent with past practices
and quantities, as necessary to facilitate the
financing of the Cactus Project.
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(b) As may be necessary in order to ensure adequate
wastewater disposal from the Xxxxx Plant in order
to continue normal operations of the Xxxxx Plant at
those levels in effect at the time of this
Agreement, ConAgra shall provide all guarantees,
indemnities, bonding arrangements, letters of
credit and other similar financial support
necessary to complete the financing of the Cactus
Project.
(c) ConAgra shall pay, or shall reimburse the Holdco
Indemnified Parties for, all capital expenditures
in excess of Ten Million United States Dollars
($10,000,000) in the aggregate paid, or required to
be paid, by Holdco Indemnified Parties in order (x)
for Holdco Indemnified Parties or the City of
Cactus, Texas to comply with any requirement of any
Governmental Authority imposed or required in
connection with the Cactus Project or (y) to
facilitate the wastewater disposal facility of the
City of Cactus, Texas to be in compliance with
applicable Environmental Laws, in each case of
clause (x) and (y) as may be required for the Xxxxx
Plant to continue its normal operations at those
levels in effect at the time of the Agreement,
whether such capital expenditures are incurred
on-site or off-site the current premises of the
Xxxxx Plant. The obligations set forth in this
Section 14.1 shall not be subject to the provisions
of Section 12.7.1(iii) or Section 12.7.1(iv).
(d) Subject to Subsection (f) hereof, ConAgra and
Holdco shall, and Holdco shall cause the Acquiring
Companies and Acquired Companies to, use all
reasonable efforts (i) to induce the appropriate
Governmental Authorities not to require any of the
foregoing support or capital expenditures by
ConAgra; (ii) if any of the foregoing support or
capital expenditures are required, to minimize the
support or capital expenditures required; and (iii)
to minimize the cost of the Cactus Project
consistent with allowing the Xxxxx Plant to operate
at those levels in effect at the time of this
Agreement.
(e) Holdco shall, and shall cause the Acquiring
Companies and Acquired Companies to, (x) keep
ConAgra apprised, and shall provide a copy where
available, of all discussions, correspondence,
agreements and other communications between Holdco
or its Affiliates and the City of Cactus, Texas or
any other Governmental Authorities relating to the
Cactus Project or wastewater disposal at the Dumas
Plant, and (y) allow ConAgra the opportunity to
participate in any such discussions. In no event
shall Holdco, the Acquiring Companies or the
Acquired Companies enter into, or otherwise make,
any agreement or commitment that will require
ConAgra
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to provide support pursuant to Section 14.1.1(b)
without ConAgra's prior consent, which consent
shall not be unreasonably withheld.
(f) Except as provided in Subsection (a) above, neither
Holdco nor any Acquiring Company or Acquired
Company shall be obligated to provide any
guarantees, indemnities, bonding arrangements,
letters of credit or other similar financial
support to facilitate the financing of the Cactus
Project.
14.2. RIGHT OF FIRST OFFER.
14.2.1. RIGHT OF FIRST OFFER. For a period of one year following
the Closing Date, prior to any Transfer or attempted
Transfer by ConAgra or any Affiliate thereof ("Montgomery
Owner") of all or any part of the Montgomery Owner's
right, title and interest in the facility or operations
located in Montgomery, Alabama described on Exhibit 14.2.1
(collectively, the "Montgomery Facilities"), Montgomery
Owner shall (i) give notice (the "Transfer Notice") to
Holdco of its intention to effect a Transfer, and provide
Holdco with a proposed cash purchase price (the "Proposed
Purchase Price") for which it desires to Transfer the
Montgomery Facilities. After receipt of the Transfer
Notice, Holdco (or, if applicable, any Subsidiary thereof)
shall have the option for thirty (30) days to elect to
purchase the Montgomery Facilities for the Proposed
Purchase Price (subject to the negotiation, execution and
delivery of mutually acceptable definitive agreements) by
delivering a written notice (the "Election Notice") of
such election to Montgomery Owner within such 30-day
period. Montgomery Owner shall not consummate such
Transfer until the earlier to occur of the lapse of the
30-day period or the date on which Holdco (or, if
applicable, any Subsidiary thereof) notifies Montgomery
Owner in writing that it will not exercise its rights
under this Section 14.2.1 (the "Authorization Date"). If
Holdco (or, if applicable, any Subsidiary thereof) does
not elect to purchase the Montgomery Facilities or fails
to make a timely election, Montgomery Owner may Transfer
the Xxxxxxxxxx Facilities to a third Person at a cash
price no lower than the Proposed Purchase Price, during
the one hundred eighty (180) day period immediately
following the Authorization Date. If the Montgomery
Facilities are not so transferred within such 180-day
period, then the Montgomery Facilities must be reoffered
to Holdco in accordance with the provisions of this
Section 14.2.1 if Montgomery Owner still desires to
Transfer the Montgomery Facilities.
14.2.2. CLOSING. If Holdco (or, if applicable, any Subsidiary
thereof) exercises the right to purchase the Montgomery
Facilities by timely delivery of the Election Notice,
unless otherwise agreed by Montgomery Owner and Holdco
(or, if applicable, its assignee), the
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closing will take place at the offices of Holdco's legal
counsel on the later of the sixtieth (60th) business day,
assuming execution and delivery of mutually acceptable
definitive agreements, after the date of the Election
Notice, or, if applicable, the fifth (5th) business day
after the date that all approvals and consents of
Governmental Authorities have been obtained. At the
closing, Holdco shall cause the purchaser to pay to
Montgomery Owner the Proposed Purchase Price, and
Montgomery Owner will transfer and deliver the Montgomery
Facilities, free and clear of all Liens (other than as
permitted under such definitive agreement). Montgomery
Owner shall and Holdco shall cause the purchaser to
promptly perform, whether before or after any such
closing, such additional acts (including, without
limitation, the making of all filings necessary to obtain
all required consents and approvals of Governmental
Authorities, and executing and delivering additional
documents) as are reasonably required by either such party
to effect the transactions contemplated by this Section
14.2.2.
14.2.3. ASSIGNMENT. The rights of Holdco under this Section 14.2
may be assigned or transferred in whole or in part to any
Subsidiary of Holdco without any consent or action on the
part of any other party hereto.
14.2.4. CERTAIN DEFINITION. For purposes of this Section 14.2,
"Transfer" shall mean any direct or indirect sale,
transfer, assignment, gift, conveyance or other
disposition of the Montgomery Facilities or any interest
therein (including by way of liquidation, merger,
consolidation or sale or exchange of assets or securities)
to any Person who is not a direct or indirect wholly-owned
Subsidiary of ConAgra.
14.2.5. FURTHER ASSURANCES. After the Closing, each party shall
take such further actions and execute such further
documents as may be necessary or reasonably requested by
the other party in order to effectuate the intent of this
Agreement and to provide such other party with the
intended benefits of this Agreement.
15. MISCELLANEOUS. The following miscellaneous provisions shall apply to
this Agreement:
15.1. NOTICES. All notices or other communications required or
permitted to be given, pursuant to the terms of this
Agreement, shall be in writing and shall be deemed to be duly
given when received if delivered in person or by facsimile and
confirmed by mail, or mailed by registered or certified mail
(return receipt requested) or overnight courier, express mail,
postage prepaid, as follows:
If to ConAgra: ConAgra Foods, Inc.
Xxx XxxXxxx Xxxxx
Xxxxx, Xxxxxxxx 00000
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Attention: Corporate Controller
Facsimile: (000) 000-0000
With a copy to: XxXxxxx, North, Xxxxxx and Xxxxx, P.C.
Suite 1400, 000 Xxxxx 00xx Xxxxxx
Xxxxx, XX 00000
Attention: Xxxxx Xxxxx
Facsimile: (000) 000-0000
If to Acquisition LP: Hicks, Muse, Xxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxxx
Facsimile: (000) 000-0000
With a copy to: Xxxxxx & Xxxxxx L.L.P.
0000 Xxxx Xxxxxx
0000 Xxxxxxxx Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
and
Winston & Xxxxxx
00 X. Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxx
Facsimile: (000) 000-0000
or at such other address as the party to whom notice is to be given furnishes in
writing to the other party in the manner set forth above.
15.2. AMENDMENTS AND WAIVERS. This Agreement may not be modified or
amended, except by instrument or instruments in writing,
signed by the party against whom enforcement of any such
modification or amendment is sought. Either ConAgra, on the
one hand, or Acquisition LP, on the other hand, may, by an
instrument in writing, waive compliance by the other party
with any term or provision of this Agreement on the part of
such other party to be performed or complied with. No action
taken pursuant to this Agreement, including any investigation
by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any
representation, warranty or agreement contained herein. The
waiver by any party hereto of a breach of any term or
provision of this Agreement shall not be construed as a waiver
of any subsequent breach.
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15.3. EXPENSES. ConAgra and Acquisition LP have listed on Exhibit
15.3 the fees payable to each of them, or their respective
Affiliates or partners, other than expense reimbursements, in
connection with the consummation of the transactions
contemplated by this Agreement. ConAgra and Acquisition LP
have received the Senior Bank Commitment Letter and the Bridge
Commitment Letter setting forth the fees payable thereunder.
At the Closing, Holdco shall pay or reimburse all of the costs
and expenses of the parties and their respective partners,
Affiliates, representatives, counsel and other advisors in
connection with the preparation and execution of this
Agreement and the consummation of the transactions
contemplated herein, including, without limitation, those
listed on Exhibit 15.3 and those set forth in the Senior Bank
Commitment Letter and the Bridge Commitment Letter.
Notwithstanding the foregoing to the contrary, ConAgra shall
not be entitled to receive payment or reimbursement for, and
Holdco shall not be required to pay or reimburse ConAgra for,
any fees or related costs and expenses payable to Gleacher &
Co., and ConAgra shall pay all such amounts when due and
payable. Except as otherwise provided herein, in the event
that the transactions contemplated by this Agreement shall not
be consummated, ConAgra and Acquisition LP shall each pay
their own expenses, and those of their respective Affiliates,
in connection with the preparation and execution of this
Agreement and the consummation of the transactions
contemplated herein and any expenses specifically payable by
them pursuant to this Agreement.
15.4. AFFILIATE LIABILITY. Each of the following is herein referred
to as an "Acquisition LP Affiliate": (a) any direct or
indirect holder of any equity interests or securities in
Acquisition LP (whether limited or general partners, members,
stockholders or otherwise) or (b) any director, officer,
limited or general partner, employee, representative or agent
of (i) Acquisition LP, (ii) any Affiliate of Acquisition LP or
(iii) any such holder of equity interests or securities
referred to in clause (a) above. Except to the extent that an
Acquisition LP Affiliate is an express signatory party hereto
or thereto, no Acquisition LP Affiliate shall have any
Liability or obligation of any nature whatsoever in connection
with or under this Agreement, any of the other Transaction
Documents or the transactions contemplated hereby or thereby,
and ConAgra hereby waives and releases all claims of any such
Liability and obligation.
15.5. ENTIRE AGREEMENT. This Agreement (which term shall be deemed
to include the Exhibits and Schedules hereto and the other
certificates, documents and instruments delivered hereunder)
and the Confidentiality Agreement constitute the entire
agreement among the parties hereto with respect to the subject
matter hereof and supersede all prior agreements and
understandings, oral and written, among the parties hereto
with respect to the subject matter hereof.
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15.6. TERMS OF SALE. The parties agree and acknowledge, on behalf of
themselves and their Affiliates, that EXCEPT AS OTHERWISE
SPECIFICALLY SET FORTH IN THIS AGREEMENT OR THE OTHER
TRANSACTION DOCUMENTS, THE ACQUIRED COMPANIES AND THE SHARES
OF HOLDCO ARE BEING SOLD HEREUNDER WITHOUT ANY REPRESENTATIONS
OR WARRANTIES, EXPRESS OR IMPLIED, OTHER THAN THE
REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS
AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS. EXCEPT FOR
CLAIMS MADE IN ACCORDANCE WITH THE SPECIFIC TERMS OF THIS
AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS, NO CLAIMS SHALL
BE MADE AGAINST CONAGRA OR ITS AFFILIATES IN RESPECT OF ANY
REPRESENTATION, WARRANTY, INDEMNITY, COVENANT OR UNDERTAKING.
THE PARTIES CONFIRM THAT THEY HAVE NOT RELIED ON ANY
REPRESENTATION, WARRANTY, INDEMNITY, COVENANT OR UNDERTAKING
OF ANY PERSON WHICH IS NOT EXPRESSLY CONTAINED IN THIS
AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS.
15.7. APPLICABLE LAW. This Agreement and the legal relations among
the parties hereto shall be governed by and construed in
accordance with the laws of the State of Delaware applicable
to contracts made and performed in Delaware.
15.8. BINDING EFFECT; BENEFITS. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
respective successors and assigns. Except as set forth in
Section 6.1, Section 9.5 and Article 12, nothing in this
Agreement, express or implied, is intended to confer on any
Person other than the parties hereto or their respective
successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
Notwithstanding anything to the contrary contained herein,
from and after the Closing all rights, benefits and
obligations in favor of Holdco shall also inure to the benefit
of each of the other Acquiring Companies and Acquired
Companies and thereafter be enforceable by each of the other
Acquiring Companies and Acquired Companies to the same extent
such rights, benefits and obligations are enforceable by
Holdco; provided that in no event may Acquisition LP, Holdco,
the other Acquiring Companies and/or the Acquired Companies
recover duplicate Holdco Indemnified Costs or other recoveries
hereunder.
15.9. ASSIGNABILITY. Neither this Agreement nor any of the parties'
rights hereunder shall be assignable by any party hereto
without the prior written consent of the other party hereto;
provided, however, that to the extent requested by a lender
pursuant to the Senior Bank Commitment Letter, the parties
shall execute and deliver such documents as may be necessary
to
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effect a collateral assignment of the rights arising under
this Agreement to the lenders under the Senior Bank Commitment
Letter.
15.10. INTERPRETATION; EFFECT OF HEADINGS. The headings of the
various sections and subsections herein are inserted merely as
a matter of convenience and for reference and shall not be
construed as in any manner defining, limiting, or describing
the scope or intent of the particular sections to which they
refer, or as affecting the meaning or construction of the
language in the body of such sections. The words "this
Agreement," "herein," "hereby," "hereunder," and "hereof," and
words of similar import, refer to this Agreement as a whole
and not to any particular subdivision unless expressly so
limited. The words "this Article," "this Section" and "this
subsection" and words of similar import, refer only to the
Articles, Sections or subsections hereof in which such words
occur. The word "or" is not exclusive, and the word
"including" (in its various forms) means "including without
limitation." Pronouns in masculine, feminine or neuter genders
shall be construed to state and include any other gender and
words, terms and titles (including terms defined herein) in
the singular form shall be construed to include the plural and
vice versa, unless the context otherwise expressly requires.
Unless the context otherwise requires, all defined terms
contained herein shall include the singular and plural and the
conjunctive and disjunctive forms of such defined terms. The
table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
15.11. EXHIBITS; SCHEDULES. All Exhibits and Schedules referred to in
this Agreement are attached hereto and are incorporated herein
by reference as if fully set forth herein. The disclosure of
any matter in any Schedule shall not be deemed to constitute
an admission by any party or to otherwise imply that any such
matter is material or may have a Company Material Adverse
Effect for purposes of this Agreement.
15.12. SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall be
ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms
or other provisions of this Agreement in any other
jurisdiction.
15.13. CONSTRUCTION. The language in all parts of this Agreement
shall in all cases be construed as a whole according to its
fair meaning, strictly neither for nor against any party
hereto, and without implying a presumption that the terms
thereof shall be more strictly construed against one party by
reason of the rule of construction that a document is to be
construed more strictly against the person who himself drafted
same. It is hereby agreed
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that representatives of both parties have participated in the
preparation hereof.
15.14. COUNTERPARTS. This Agreement may be executed and delivered
(including by facsimile transmission), in one or more
counterparts, each of which shall be regarded as an original
and all of which shall constitute one and the same instrument.
15.15. PUBLICITY. Except as may be necessary in connection with
seeking the financings contemplated by the Senior Bank
Commitment Letter and the Bridge Commitment Letter or in
connection with the Financing and except as mutually agreed in
writing by ConAgra and Acquisition LP, none of the parties
hereto shall issue any press release or make any public
statement or disclosure pertaining to the terms of this
Agreement or the transactions contemplated hereby (except as
required by Law).
15.16. CONSENT TO JURISDICTION. THE PARTIES HERETO HEREBY IRREVOCABLY
SUBMIT TO THE EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR DELAWARE STATE COURT SITTING IN WILMINGTON,
DELAWARE IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH
ACTION OR PROCEEDING SHALL BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. THE PARTIES HERETO SHALL CAUSE ALL
ACQUIRED COMPANIES AND ACQUIRING COMPANIES TO BE BOUND BY THIS
SECTION.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.
CONAGRA: ACQUISITION LP:
CONAGRA FOODS, INC., HMTF RAWHIDE, L.P.
a Delaware corporation
By: HMTF RW, L.L.C., its General Partner
By: /s/ XXXXXX X. XXXXXX By: Hicks, Muse, Xxxx & Xxxxx Equity
-------------------------- Fund V, L.P., its sole member
Xxxxxx X. Xxxxxx,
Executive Vice President, Operations
Control and Development By: HM5/GP LLC, its General
Partner
By: /s/ XXXXXX XXXXXXX
------------------------
Xxxxxx Xxxxxxx,
Vice President
HOLDCO:
S&C HOLDCO, INC.,
a Delaware corporation
By: /s/ XXXXXX X. XXXXXX
------------------------------------
Xxxxxx X. Xxxxxx, President
